STI rises 0.2% on hopes of softer US Fed rate hikes

SINGAPORE shares rose marginally on Wednesday (Dec 14), after milder-than-expected inflation data from the US raised hopes on Wall Street that the Federal Reserve (Fed) would soften its aggressive stance on interest-rate hikes.

The Straits Times Index (STI) gained 7.29 points or 0.2 per cent to stand at 3,278.57, while key regional bourses also posted advances. Yet, caution prevailed ahead of the US Federal Open Market Committee (FOMC) meeting, as the consumer price index (CPI) reading of 7.1 per cent for November suggested that the Fed still has some way to go in its tightening trajectory.

Mansoor Mohi-uddin, Bank of Singapore’s chief economist, said: “US inflation remains far above the FOMC’s 2-per-cent target. But November’s data, coupled with softer inflation in October, will be encouraging for officials. Cooling inflation will allow the FOMC to reduce its pace of rapid rate rises.”