Singapore shares up with market bullish ahead of inflation data, Fed chief’s speech

SINGAPORE - Singapore stocks extended their rally on Aug 20 as investors eagerly await the Republic’s July inflation data and US Federal Reserve chairman Jerome Powell’s keynote speech on Aug 23.

The Straits Times Index (STI) gained 0.4 per cent, or 14.75 points, to 3,370.31. Across the broader market, gainers beat losers 313 to 231 after 904.19 million securities worth $968.95 million changed hands.

Mr Vasu Menon, managing director of investment strategy of OCBC Bank, noted that global stock markets appear to have turned the corner. “The MSCI All Country Global Index has rallied since Aug 5 after the Bank of Japan backtracked into dovish terrain and because some US data like jobless claims and retail sales turned out to be better than expected and allayed fears of a recession,” he said.

Japan’s Nikkei 225 climbed 1.8 per cent, while South Korea’s Kospi rose 0.8 per cent.

“The market has largely priced in a 25-basis point September Fed rate cut, so if Powell signals this, it won’t come as a surprise. What markets will be keen to know is whether Powell expresses concerns about the economy and labour markets,” said Mr Menon, noting that if Mr Powell expresses worries about the labour market, market sentiment could be further boosted as this may imply consecutive rate cuts this year.

Chinese stock markets were in the red after the People’s Bank of China kept the August benchmark lending rates unchanged on Aug 20. This is seen as a move to save the shrinking profit margins of the country’s financial institutions. The Shenzhen Stock Exchange Composite Index lost 1.4 per cent, while Hong Kong’s Hang Seng Index fell 0.3 per cent.

On the STI, Sats was the top gainer, rising 3.5 per cent to $3.22.

CapitaLand Integrated Commercial Trust was at the bottom of the table. It shed 2.3 per cent to $2.08 on an ex-distribution basis.

THE BUSINESS TIMES