S'pore shares up as region takes cue from Fed's hawkish move

Local shares ended on a more upbeat note yesterday as investors appeared buoyed by cues from the United States Federal Reserve on ending its asset buying programme and raising interest rates next year.

The central bank said on Wednesday that it will double its pace of tapering, which puts the bank in a position to raise rates earlier than expected if necessary to fight inflation, even with the ongoing pandemic.

Financial markets in Asia reacted in kind, taking their cue from US stock markets.

The benchmark Straits Times Index (STI) rose 0.5 per cent, or 13.92 points, to 3,128.80.

Gainers outpaced losers 265 to 202, after 941 million shares worth $979.1 million changed hands.

Elsewhere in Asia, the Nikkei 225 was up 2.1 per cent, the Hang Seng Index gained 0.2 per cent and the KLCI added 0.1 per cent, while the Kospi advanced 0.6 per cent.

Oanda senior market analyst Edward Moya said: "US stocks turned positive after the Fed doubled the pace of tapering and forecast three rate hikes in 2022 and another three increases in 2023.

"Financial markets were nervous that the Fed was going to exercise caution with a doubling of the taper pace, which would have been a policy mistake."

The trio of local lenders came out tops yesterday. DBS was the top advancer, rising 1.4 per cent to $32.33. UOB was a close second, adding 1.3 per cent to $27.03, while OCBC gained 0.8 per cent to $11.38.

Isetan was the biggest loser after announcing that its plans to sell its space at Wisma Atria shopping mall in Orchard Road fell through. The counter ended the day at $3.69, down 10.4 per cent.

HGH Holdings was the most actively traded counter, with 48.6 million shares changing hands over the course of the day. The stock closed at 1.5 cents, up 15.4 per cent.

Other actively traded counters were Metech International, Singtel and Disa.