Singapore's STI opens higher after Fed signals rate hike this year

SINGAPORE share prices opened higher on Monday with the Straits Times Index up 6.74 points to 3,456.92 at 9.08am.

This was despite US stocks ending weaker on Friday after Federal Reserve chair Janet Yellen said the central bank was poised to raise interest rates this year, in line with Wall Street's expectations, if the economy keeps improving as forecast.

Japan also announced on Monday that exports rose 8 per cent in April from a year earlier, up for an eighth straight month, underlining a gradual pickup in external demand.

The exchange's biggest movers in early trading include local banking plays such as DBS and OCBC, which analysts have said will see their return on equity benefit from an interest rate increase.

At 9am, DBS was up eight cents to S$20.91 and OCBC up four cents to S$10.41.

Wilmar International also rose three cents to S$3.38 as investors continued to bet on palm oil futures' rebound.

By 9.08am, 149.5 million shares worth S$61.6 million had changed hands, with gainers outnumbering losers 94 to 74.