STI up 1.2%, buoyed by the latest US inflation data, as S’pore stocks track regional gains

SINGAPORE – Local shares broke their three-day losing streak with some ease on Aug 13 as investor optimism over new US inflation data boosted global markets.

The very real prospect of an impending interest rate cut in the US in September propelled the Straits Times Index (STI) up 1.2 per cent or 52.04 points to 4,272.76. Across the broader market, gainers beat losers 391 to 185 on trade of 1.9 billion securities worth $2 billion.

The mood was set by Wall Street overnight when the encouraging inflation numbers sent the three key indexes up by around 1.2 per cent, leaving the Nasdaq and the S&P 500 at record levels.

Regional markets needed no more encouragement. Hong Kong’s Hang Seng led the charge, surging 2.6 per cent, while South Korea’s Kospi rose by 1.1 per cent, the Nikkei 225 in Japan gained 1.3 per cent and Malaysian shares climbed 1.2 per cent.

Australia missed the boat after some mediocre corporate results left the ASX 200 down 0.6 per cent after hitting a record in early trading.

Julius Baer chief economist David Kohl noted that prices of items potentially affected by higher tariffs, such as apparel and electronics, have gone up slightly in the US.

“These scattered signs suggest that tariffs are driving up the prices of a number of goods,” he said, adding that inflation remains closer to 3 per cent than to the US Federal Reserve’s target of 2 per cent.

“We expect more signs of slowing demand and a softer labour market in the coming weeks,” Mr Kohl added.

On the home front, City Developments Limited was the STI’s top gainer, rising 7.1 per cent to $6.80, while Wilmar International led the losers, falling 1 per cent to $2.94 despite a 2.6 per cent rise in first-half net profit.

The local banks gained ground. DBS climbed 1 per cent to $51.45, UOB was up 0.9 per cent to $36.19 and OCBC rose 0.4 per cent to $16.81.

THE BUSINESS TIMES