Singapore stocks surge as easing US inflation lifts markets; STI up 2%

SINGAPORE shares rallied as cheers swept across the region on Thursday (Jul 13) following a softer US inflation print that sparked hopes Federal Reserve rate hikes could end soon.

The Straits Times Index (STI) surged 63.1 points or 2 per cent to 3,238.46, taking the cue from significant overnight gains on Wall Street as the S&P 500 and Nasdaq hit new highs since April and January last year, respectively.

Key bourses across the region from Japan, China, Hong Kong and South Korea to Taiwan and Australia finished higher, while Malaysia bucked the trend by closing marginally lower.

US June consumer price index (CPI) came in softer than expected on an annual as well as sequential basis, suggesting that the tightening cycle from the Federal Reserve thus far is having its desired effect in moderating price pressures.

DBS Group Research said in a report: “The upshot is that the Fed will likely be pleased with this set of numbers even if it is too early to acknowledge victory. We suspect that Fed members will still maintain a hawkish rhetoric and deliver the last 25-basis-point hike, taking the terminal rate to 5.5 per cent for this cycle.

“However, it is clear that the hurdle for further hikes is high. A few more prints of benign CPI will put an end to further hike speculation (beyond July) even if the Fed will want to keep the option open.” 

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On the home front, some 2.1 billion securities worth S$1.5 billion were traded. Gainers trounced losers, with 407 counters up and 242 down.

Offshore and marine giant Seatrium was – as it has frequently been – the day’s most active counter on the local bourse with 917 million shares done. The counter gained S$0.003 or 2.1 per cent to S$0.144. On Wednesday after the trading session, Seatrium announced that it has secured a green trade finance facility with a banker’s guarantee from OCBC worth 720 million euros (S$1.1 billion) to fund its sustainability efforts.

Thomson Medical Group climbed S$0.003 or nearly 5 per cent to S$0.064 after making good on its expansion promise. The healthcare group announced on Wednesday that it plans to acquire the owners and operator of a range of healthcare facilities in Vietnam for about US$380 million. The counter resumed trading on Thursday following a trading halt pending the announcement. It was the day’s third-most active counter with 56 million shares changing hands.