Singapore stocks rise on market sentiment after Wall St advance; STI up 1.1%

SINGAPORE – Singapore shares and those across the region rallied on Aug 16 amid receding recession fears in the United States and optimism over interest rates.

The buoyant sentiment – underpinned by advances on Wall Street – drove the Straits Times Index (STI) up 1.1 per cent, or 37.16 points, to 3,352.89. In the broader market, gainers outstripped losers 376 to 229 on trade of 940.8 million shares worth $1.3 billion.

Other Asian markets also rallied. Japan’s Nikkei 225 climbed 3.6 per cent, while South Korea’s Kospi rose 2 per cent and Hong Kong’s Hang Seng gained 1.9 per cent.

Australian shares soared 1.3 per cent to a two-week high and 2.5 per cent ahead for the week after Wall Street rose overnight on the back of data that continued to defuse the recession fears that hammered markets earlier in August.

RHB acting group chief economist and head of market research Barnabas Gan noted that these fears were “clearly overstated”.

He added that the market has been pricing in lower rate-cut expectations, from a 100 to 125 basis-point cut on Aug 5 to 75 to 100 basis points by the end of 2024.

“Suffice it to say, market swap pricing had been consistently wrong since the start of the year, whereby the initial call for six rate cuts seen at the beginning of this year did not materialise in any form,” he said.

Mr Gan added that the relatively quicker normalisation of US jobs data injects a “strong bias” for a rate cut in September.

Mapletree Pan Asia Commercial Trust was the STI’s top gainer, rising 2.4 per cent to $1.27, while CapitaLand Investment also did well, climbing 2.4 per cent to $2.57.

The local banks also rose. DBS Bank added 2.3 per cent at $35.56, OCBC Bank advanced 2.1 per cent to $14.31, and UOB climbed 1.3 per cent to $30.43.

Singtel was at the bottom of the STI table, shedding 1.3 per cent to $2.98.

THE BUSINESS TIMES