STI ends trading week up 0.79%; investors seek comfort in Fed's latest policy move

SINGAPORE stocks ended the week higher as investor sentiment was lifted by the Federal Reserve's move to prioritise a strong job market over inflation in its new approach to monetary policy.

Local investors reacted to the news of low interest rates for the foreseeable future, causing the benchmark Straits Times Index to rise 0.79 per cent or 19.82 points to 2,539.63.

Advancers outnumbered decliners 228 to 208, after some 2.41 billion securities worth S$1.2 billion changed hands.

Oanda senior market analyst Jeffrey Halley said the news from the Fed was "mostly expected" and is unlikely to structurally change the "buy-everything sentiment" of global stock markets. Yet, he warned that investors should not expect low interest rates to last.

"The US government has a lot of bond issuance it will need to do in that part of the curve to cover its eye-watering fiscal deficits in the years ahead," he said.

"A good bout of inflation globally is going to be about the only way the world will be able to deflate the government debt to manageable levels," he added.

Banks were among the top gainers for the day. DBS rose S$0.30 or 1.47 per cent to close at S$20.76; UOB added S$0.18 or 0.92 per cent to S$19.66 while OCBC gained S$0.10 or 1.16 per cent to S$8.71.

Real estate investment trusts (Reits) emerged a top favourite for the day. Capitaland Commercial Trust rose S$0.04 or 2.5 per cent to S$1.64; CapitaLand Mall Trust added S$0.04 or 2.15 per cent to close at S$1.90.

Aviation counters, too, booked gains. Singapore Airlines rose S$0.05 or 1.38 per cent to close at S$3.68, and gateway solutions provider SATS gained S$0.05 or 1.71 per cent to end the day at S$2.98.

Thai Beverage emerged the most actively traded stock for the day, with some 46.5 million shares changing hands. The counter closed at S$0.615, up S$0.005 or 0.82 per cent.

On the other end of the spectrum, members of the Jardine Group of companies were among the biggest decliners. Dairy Farm fell S$0.06 or 1.41 per cent to US$4.21, while Jardine Cycle and Carriage lost S$0.02 or 0.11 per cent to close at S$19.11. Jardine Matheson Holdings and Jardine Strategic Holdings fell by 0.38 per cent and 0.05 per cent respectively.

Elsewhere in Asia, the FTSE Bursa Malaysia KLCI Index slipped 1.90 per cent or 29.57 points to close at 1,525.21 points; the Nikkei 225 Index lost 1.41 per cent or 326.21 points. The Hang Seng Index gained 0.56 per cent or 140.91 points. (amendment note)

Amendment note: The article previously stated the Hang Seng Index gained 0.24 per cent or 9.35 points when it had in fact gained 0.56 per cent or 140.91 points.