STI rises 0.2% on hopes of milder US Fed rate hikes

SINGAPORE - Singapore shares rose marginally on Wednesday, after milder than expected inflation data from the United States raised hopes on Wall Street that the Federal Reserve would soften its aggressive stance on interest rate hikes.

The Straits Times Index (STI) gained 7.29 points or 0.2 per cent to stand at 3,278.57, while key regional bourses also posted advances.

Yet, caution prevailed ahead of the US Federal Open Market Committee (FOMC) meeting on Wednesday (Thursday morning, Singapore time), as the consumer price index reading of 7.1 per cent for November suggested that the Fed still has some way to go in its tightening trajectory.

Mr Mansoor Mohi-uddin, Bank of Singapore’s chief economist, said: “US inflation remains far above the FOMC’s 2 per cent target. But November’s data, coupled with softer inflation in October, will be encouraging for officials. Cooling inflation will allow the FOMC to reduce its pace of rapid rate rises.”

He added that Fed officials would also be wary, however, of “prematurely declaring victory as more sustained sources of inflation, including rents and wages, are still running far too hot”.

Turnover on the STI came in at 1.2 billion units worth $1.3 billion. Gainers outnumbered losers 310 to 196. CapitaLand Integrated Commercial Trust, OCBC and Genting Singapore were some of the stocks that helped drive the day’s rise.

Wilmar International turned up as one of the top three integrated palm oil player picks by RHB Research.

On Wednesday, the research house rated the counter as a “buy” with a target price of $5.40 against a “neutral sector weighting with a trading strategy”.

Wilmar shares finished at $4.17, up six cents or 1.5 per cent.

Top Glove reported a net loss of RM168.2 million (S$51.7 million) for the first quarter ended November, compared with a net profit of RM185.7 million in the corresponding period a year ago. It requested a trading halt during the midday break pending the release of its results. The trading halt was lifted for the afternoon session. Its shares closed unchanged at 24 cents.