Singapore stocks edge higher on slowing June inflation; STI up 0.7%

SINGAPORE - Stocks in Singapore ended higher on July 23 as the Republic reported

inflation figures that slowed more than expected in June

.

The benchmark Straits Times Index (STI) rose 0.7 per cent, or 23.9 points, to 3,461.16. Across the broader market, gainers outnumbered losers 288 to 261, after 989.7 million securities worth $909.7 million changed hands.

Headline inflation in June was 2.4 per cent – lower than the 3.1 per cent in May and the median forecast of 2.7 per cent in a Bloomberg poll of private-sector economists – due to a fall in private transport costs and lower core inflation.

Core inflation, which excludes accommodation and private transport, stood at 2.9 per cent, down from 3.1 per cent in May, and below median estimates of 3 per cent.

Ms Selena Ling, chief economist and head of global markets research and strategy at OCBC Bank, said that inflation risks stay two-sided.

While fresh geopolitical shocks, adverse weather events and renewed transportation disruptions put upward pressure on commodity and shipping costs, any unexpected weakening in the global economy will result in the opposite scenario, Ms Ling said.

Domestically, a potentially stronger-than-expected labour market could also cause wage growth to re-accelerate, she added.

Elsewhere in the region, key indexes were mixed. The Nikkei 225 slipped 0.01 per cent and the Hang Seng Index fell 0.9 per cent. Meanwhile, the Kospi Composite Index rose 0.4 per cent. The FTSE Bursa Malaysia KLCI was up 0.5 per cent.

On the STI, Seatrium is the biggest gainer, rising 3.5 per cent or five cents to $1.50. Singtel is the biggest loser, falling 1 per cent or three cents to $3.02.

The local banking trio ended higher. DBS Bank rose 1.5 per cent or 55 cents to $36.75, OCBC Bank gained 0.7 per cent or 11 cents to $15.16, while UOB was up 0.9 per cent or 29 cents to $32.86.

THE BUSINESS TIMES