STI up 0.5% as relief over US inflation fuels rally in Asia

Local shares rose again yesterday amid a regional rally sparked by relief that inflation is decelerating in the United States.

The hope now is that the US Federal Reserve could pivot to a less aggressive pace of interest rate hikes.

The benchmark Straits Times Index (STI) closed 0.5 per cent or 15.63 points higher at 3,301.96 with gainers far outnumbering losers 304 to 200 after 1.43 billion shares worth $1.28 billion changed hands. Oanda senior market analyst Edward Moya said US inflation data was the main event of the week, and it did not disappoint, showing that relief is on its way.

"Trades are growing confident that if the next inflation report on Sept 13 confirms this softening pricing pressure trend, the Fed may seriously consider a smaller pace of tightening," he added.

Wall Street responded with glee overnight with rises of between 1.6 per cent and 2.9 per cent on the three main indexes. That resonated across the region with major indexes in Hong Kong, Australia and South Korea rising between 1.1 and 2.4 per cent. Japan's market was closed for a holiday.

Most STI constituents rallied along with the sentiment, but not CapitaLand Investment Limited, which took a drastic turn from being among Wednesday's top performers to shed 4.4 per cent after posting dismal financial results.

The property investment manager reported a 38.3 per cent fall in profit to $433 million due to "lower velocity in asset recycling activities", particularly in China.

Singtel, ST Engineering and City Development were the three other STI counters that closed lower, slipping between 0.1 and 1.1 per cent.

The top performers were Yangzijiang Shipbuilding, Mapletree Logistics Trust and Thai Beverage, which closed up between 2.3 and 2.6 per cent. The three banks rose between 0.7 and 1 per cent.

Yangzijiang Financial was the most active, with 89.5 million shares traded.