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Singapore: Shares open higher on Wednesday after US Fed testimony


SINGAPORE shares opened higher on Wednesday after US Federal Reserve chair Janet Yellen signalled a hike in interest rates was unlikely before mid-year.

At 9.20am, the benchmark Straits Times Index was up 2.61 points at 3,440.22. About 148 million shares, valued at S$124 million, changed hands. There were 108 gainers to 71 losers.

The most active stock was Genting Singapore, down six cents to S$0.985 a share due to the lower revenue and earnings it reported on Tuesday.

Singapore Exchange was up six cents at S$8.28 a share, despite CEO Magnus Bocker's surprise announcement that he was leaving the company after his contract ends this June.

Earlier, Ms Yellen had told Congress that while the central bank was pleased with recent economic growth in the US, there was room for improvement: "However, despite this improvement, too many Americans remain unemployed or underemployed, wage growth is still sluggish and inflation remains well below our longer-run objective."

She added that the Fed is preparing to consider interest rate hikes "on a meeting-by-meeting basis", a subtle shift of emphasis that helps lay the groundwork for the Fed's first rate hike since 2006, according to Reuters.

She also signalled that the Fed is deep in preparation for a rate hike this year, even though she ruled out the move until June at the earliest.

Her comments sent markets rallying. The Dow Jones Industrial Average rose 92.35 points, or 0.51 per cent, to 18,209.19, while the tech-focused Nasdaq Composite Index climbed 7.15 points, or 0.14 per cent, to 4,968.12. The broad-based S&P 500 gained 5.82 (0.28 per cent) at 2,115.48, inching up to a new all-time close.

Europe's main stock markets also closed higher on Tuesday, with London's benchmark FTSE 100 index hitting its highest level on record, up 0.54 per cent to 6.949.63 points.

Tokyo stocks opened 0.18 per cent higher on Wednesday - adding 32.86 points to 18,636.34 at the start - following after the record-setting gains on Wall Street.