Singapore stocks finish higher after Yellen's hawkish speech boosts banks
MONDAY's column highlighted the fact that the Straits Times Index's fortunes depend heavily on the banks and that movement in bank shares were in turn driven by interest rate expectations.
Also discussed was that instead of lower interest rates driving stocks higher, it was expectations of higher rates which were thought to translate to higher bank earnings and through to higher share prices.
On Wednesday, the index jumped 24.11 points to 3,236.15 driven by large rebounds in the three banks, their gains accounting for about 17 points. Heightened activity in the banks and also Mandarin Oriental meant volume amounted to 1.7 billion units worth S$1.1 billion compared to only S$890 million the day before.
On Tuesday, US Federal Reserve chair Janet Yellen delivered a speech that many interpreted as hawkish and hinted at a December rate hike which the market had previously thought unlikely.
In the federal funds futures market, the implied probability of rates being raised in December rose from 60 per cent to 70 per cent on Tuesday, more than twice what it was a fortnight ago.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Capital Markets & Currencies
Europe: Tech, retail stocks boost Stoxx 600 to one-week high
US: Stocks climb for second straight day
Euro at highest to yen since 2008, markets nervy over Tokyo stepping in
Singapore stocks track Wall Street gains on Tuesday; STI up 1.5%
UBS lifts Chinese stocks to overweight in rare upgrade call
Asia: Most markets rise with earnings, US data in view