Singapore stocks track Wall St gains amid optimism on rate cuts, STI up 0.6%

SINGAPORE – A positive session on Wall Street overnight gave local stocks just the jolt they needed to break their losing streak on Nov 29.

The benchmark Straits Times Index (STI) took the hint and rose 0.6 per cent or 18.76 points to 3,084.70, with gainers outnumbering losers 310 to 278, after 993.1 million shares worth $926 million changed hands.

The optimism here and on Wall Street –

all three indexes recorded modest gains

– stemmed from dovish comments by United States Federal Reserve governor Christopher Waller, who is one of the most hawkish Fed officials.

The Asia-Pacific strategy team at Saxo Markets noted that he had warmed up to the idea of rate cuts, noting that the Fed could start lowering the policy rate if inflation continues to cool for several months. This caused a sharp fall in the two- and five-year US Treasury yields and put further pressure on the dollar, the team noted.

“Fed hawk Waller’s shift to a dovish rhetoric led markets to bring forward rate-cut pricing for next year, pushing yields lower and supporting equities,” Saxo said.

Meanwhile, key indexes in the region were largely in the red. The Nikkei 225 lost 0.3 per cent, the Hang Seng Index fell 2.1 per cent, while the Kospi in Seoul and Bursa Malaysia each dropped 0.1 per cent.

Frasers Logistics & Commercial Trust was the STI’s biggest gainer, rising 3.8 per cent to $1.10.

Precision plastic components manufacturer Fu Yu saw active trading on the broader market, advancing 9.5 per cent to 13.9 cents, after 4.5 million shares changed hands. It said on Nov 28 that it was projecting a brighter outlook for 2024 with the launch of new transformation strategies.

The trio of local banks all ended higher. DBS gained 0.4 per cent to $31.76, OCBC was up 0.6 per cent at $12.69 and UOB rose 0.4 per cent to $27.32.

THE BUSINESS TIMES