SINGAPORE – Local shares defied the regional trend to head north on Thursday after rate hike fears sent Wall Street going in the opposite direction overnight.

Robust figures from the United States retail sector sparked fears that inflation is primed to head higher, in turn sparking concerns that the Federal Reserve will lift rates again on Dec 14.

That sent the S&P 500 down 0.8 per cent while the tech-focused Nasdaq dived 1.5 per cent and the Dow Jones Industrial Average was off 0.1 per cent.

Those numbers could have sent local shares falling as well but the Straits Times Index (STI) held its nerve and rose 0.6 per cent, or 19.87 points, to 3,286.04.

Gainers pipped losers 274 to 273 across the broader market with 1.4 billion shares worth $1.3 billion changing hands.

Asian markets mostly followed Wall Street’s cue: Japan’s Nikkei 225 shed 0.4 per cent, the Kospi in Seoul fell 1.4 per cent and Hong Kong’s Hang Seng declined 1.2 per cent although the ASX 200 in Australia added 0.2 per cent.

SPI Asset Management managing partner Stephen Innes said that Asian stocks could have declined after China’s central bank flagged the possibility of rising inflation.

This likely added to the risk-off sentiment spurred by hawkish remarks from US Fed officials.

The People’s Bank of China raised concerns over a potential rise in inflation rates, which could reduce its scope for further monetary policy easing.

It noted on Wednesday night that fast growth in the country’s money supply and disruptions to global energy supply could lead to higher inflation.

On the STI, Sembcorp Industries was the best performer. The counter gained 5.2 per cent to close at $3.05.

Jardine Matheson Holdings was at the bottom of the table, shedding 2.6 per cent to finish at US$47.18.

The trio of banks was also in the black. DBS Bank gained 1.5 per cent to $35.61, UOB gained 1.1 per cent to $30.16 and OCBC Bank advanced 0.4 per cent to $12.47. THE BUSINESS TIMES