Soft landing bets for US economy lift investor sentiment; STI up 0.1%
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Across the broader market, gainers beat losers 288 to 266, with 920.2 million securities worth $1.1 billion traded.
PHOTO: ST FILE
Mia Pei
SINGAPORE - Singapore shares rose on Aug 19, amid expectations of a soft landing for the US economy, after Federal Reserve members flagged the possibility of easing monetary policy over the weekend.
The benchmark Straits Times Index (STI) rose 0.1 per cent, or 2.67 points, to 3,355.56. Across the broader market, gainers beat losers 288 to 266, with 920.2 million securities worth $1.1 billion traded.
STI constituent Hongkong Land led the gains, up 3.2 per cent, or 11 US cents, to US$3.58. Meanwhile, Yangzijiang Shipbuilding was at the bottom of the table, closing down 2.3 per cent to $2.51.
As US inflation continues to ease favourably, markets have gained confidence in a September rate cut. Minutes due on Aug 21 for the last policy meeting should underscore the dovish outlook, ahead of Fed chairman Jerome Powell’s speech on Aug 23.
Regional markets were broadly in the black. The Shanghai Stock Exchange Composite Index gained 0.5 per cent. Hong Kong’s Hang Seng Index rose 0.8 per cent, while Japan’s Nikkei 225 declined 1.8 per cent.
In a note on Aug 19, Bank of Singapore chief investment strategist Eli Lee highlighted that history suggests further equity upside after the first Fed rate cut if the markets see a soft-landing outcome.
“Although we believe that US growth could hit a soft path in the second half of 2024 due to the waning effects of fiscal stimulus and declining post-pandemic cash savings, our base case is that the US economy remains relatively resilient, and that the Fed will cut rates in time to avert a recession,” he said, noting that the world’s largest economy posted a 2.8 per cent gross domestic product figure for the second quarter, stronger than street estimates. THE BUSINESS TIMES
