STI rises 0.63% on US debt-ceiling optimism, upbeat macro data

SINGAPORE shares rose on Friday (May 19), fuelled by optimism over upbeat macro data out of the US and easing fears over the debt-ceiling crisis, which spurred overnight gains in Wall Street.

The key Straits Times Index advanced 20.04 points or 0.63 per cent to 3,202.59 alongside gains in key gauges across the region, although Hong Kong and China bucked the upward trend to finish lower. Over the choppy trading week, the index shed nearly six points or 0.2 per cent.

Negotiations on a US debt ceiling deal appear to be progressing. House Speaker Kevin McCarthy suggested that the House could vote on a deal as soon as next week. Risks that the talks could break down still linger, but equity markets are showing little fear over such an outcome – for now at least.

“Every step forward at a potential agreement on raising the US debt ceiling to US$31.4 trillion is fuelling the Wall Street indices with optimism, while the rebound in regional banking stocks eased looming concerns over a banking-crisis contagion,” said Phillip Nova in a note.

The brokerage added: “The dark clouds over the US economy seem to have scattered away, and overall investor sentiments improved in world equities this week.” The better-than-expected Philly Fed index and a decline in weekly jobless claims are the latest batch of data that has fuelled hope for a soft-landing scenario in the US, the world’s largest economy.

IG market analyst Yeap Jun Rong cautioned however that “lurking in the backdrop” are expectations for another 25 basis-point hike in rates by the US Federal Reserve at its June meeting.

Yeap added: “More hawkish comments from Fed officials overnight continue to challenge expectations for a June rate pause, and this may be the central focus for markets once the hype around US debt ceiling optimism passes.”

On the home front, some 1.17 billion units worth S$979.11 million were traded. Losers trumped gainers with 278 counters down and 262, up. Singapore’s banking trio DBS , UOB and OCBC led the gains in the local bourse. Gains were also led by Singapore Airlines , which continued to draw interest since it reported record revenue, operating profit and net profit in FY23.

Jardine Matheson Holdings rose US$0.34 or 0.69 per cent to US$49.94. In an interim management statement issued on Thursday, the company said most of the group’s businesses performed strongly in the first quarter, compared with the same period last year. It said Astra, DFI Retail Group, Mandarin Oriental and Jardine Pacific delivered increases in underlying net profit

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Marco Polo Marine was the day’s most active counter, with 132 million shares exchanging hands. The counter inched up S$0.003 or 6.25 per cent to S$0.051. Last week, the integrated marine logistics firm reported a 61 per cent drop in net profit to S$4.2 million on the back of a two-fold jump in revenue to S$56 million.