Singapore stocks extend gains amid bets Fed rate hikes likely over; STI up 1%

ASIAN markets including Singapore mostly climbed on Thursday (Jul 27), hours after the Federal Reserve hiked its keenly-watched policy rate range by 25 basis points to between 5.25 per cent and 5.50 per cent.

The Straits Times Index (STI) rose 32.46 points or 1 per cent to 3,337.42.

While the hike brought the policy rate to the highest level in 20 years, the US central bank said it believes the world’s largest economy might be able to stave off a recession after all.

Kerry Craig, a global market strategist at JPMorgan Asset Management, said: “We recognise that recession risks in the near term for the US economy have faded but are still above the average level. This gives us the view that investors should maintain a degree of caution when it comes to risk allocation and broader diversification in portfolios.”

Meanwhile, analysts said the meeting did all it needed to do by maintaining a hawkish tilt, but most of them are of the belief that the hiking campaign is essentially over.

Releasing its financial performance before market open with a 27 per cent jump in second-quarter net profit to S$1.4 billion, UOB share price closed 0.8 per cent higher at S$28.92. Jefferies analysts wrote that the net interest margin of 2.12 per cent and interim dividend per share of S$0.85 came in better than their forecasts and therefore expect the bank’s share price to rise.

SEE ALSO

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Singapore shares rise at Thursday’s open; STI up 0.7%

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Olam Group share price ended 6.4 per cent lower at S$1.31, a day after the agri behemoth flagged a possible one-off charge of US$83 million that would result in net profit to be “materially lower” for the first half of 2023.

In the broader market, gainers beat losers 375 to 226, with 1.3 billion securities amounting to a total value of S$1.3 billion changing hands.