Singapore stocks track Wall Street gains to end higher, STI up 1.2%

SINGAPORE – The roller coaster of expectations over United States interest rates soared into the optimistic zone on Wall Street overnight and had the usual effect on most regional markets on Feb 2.

Local investors certainly could not avoid the heady mood in New York after sharp declines there on Jan 31. The S&P 500 shot up 1.2 per cent, the Dow Jones Industrial Average added 1 per cent to hit a record high, while the Nasdaq advanced 1.3 per cent.

The benchmark Straits Times Index (STI) took the hint and rose 1.2 per cent, or 36.71 points, to 3,179.77. Gainers outstripped losers across the broader market 325 to 257 on trade of 1.5 billion securities worth $1.2 billion.

Most key regional indexes also ended higher. The Nikkei 225 was up 0.4 per cent, the Kospi in Seoul rose 2.9 per cent, Malaysian stocks inched ahead 0.2 per cent and the ASX 200 in Sydney rallied 1.5 per cent to a record close on hopes of interest rate cuts.

The region’s notable loser was the Hang Seng in Hong Kong, which fell 0.2 per cent.

Mr Vishnu Varathan, chief economist for Asia excluding Japan at Mizuho Bank, said that US manufacturing data released overnight had found itself in a “sweet spot” and underscored economic optimism about a soft landing.

“Markets were arguably really intent on a positive spin to reinforce the ‘Goldilocks soft-landing’ scenario using (the manufacturing data),” he said.

The resultant “risk-on” sentiment partially helped to recoup equity losses after the Federal Reserve meeting, and led to a slip in US Treasury yields and a softer US dollar, Mr Varathan noted.

UOL was the STI’s biggest gainer, rising 3.2 per cent to $6.20. Yangzijiang Shipbuilding was the biggest decliner, falling 1.8 per cent to $1.65.

The trio of local banks all ended higher: DBS Bank gained 1.2 per cent to $32.22, OCBC Bank rose 1.3 per cent to $13, and UOB advanced 1 per cent to $28.62.

THE BUSINESS TIMES