Singapore stocks end higher as traders mull over inflation outlook

SINGAPORE - Local shares edged higher on Wednesday as investors picked apart the latest remarks from United States Federal Reserve chairman Jerome Powell for hints on where interest rates might be headed.

His acknowledgement overnight that inflation was starting to cool was offset by a warning that stronger-than-expected economic data could bring about more rate hikes.

All in all, his comments did little to ease the sentiment of traders around the region.

Investors here opted for a safety-first approach but did send the Straits Times Index inching up 0.2 per cent, or 7.68 points, to 3,388.52, with losers pipping gainers 274 to 269 on trade of 1.2 billion shares worth $962 million.

Markets around the region mostly closed lower despite rises of between 0.8 per cent and 1.9 per cent on the three major Wall Street indices overnight following early session declines.

The Nikkei 225 lost 0.3 per cent, the Hang Seng shed 0.1 per cent and Malaysian shares slipped 0.4 per cent, although the Kospi in Seoul added 1.3 per cent and Australia’s ASX 200 broke a two-day losing streak to gain 0.4 per cent.

Mr Stephen Innes, SPI asset management’s managing partner, said Mr Powell’s comments meant there was still no “definitive hawkish deviation” from the Federal Reserve’s plot trajectory.

He added that investors in Asia were in need of a “definite sign” that economic growth in China was catching up to where the market was pricing second-quarter recovery, before “taking the next leap of faith”.

Banks were among the biggest gainers in Singapore on Wednesday. UOB added 1 per cent to $30.84. DBS rose 0.6 per cent to $36.19 while OCBC advanced 1 per cent to $13.15.

StarHub shed 6.3 per cent to close at $1.04 after it released a disappointing set of second-half results on Tuesday. The telco posted a 98.4 per cent decline in earnings to $1.3 million despite higher revenue.

THE BUSINESS TIMES