Yellen's hawkish speech gives banks a lift

MONDAY'S column highlighted the fact that the Straits Times Index's fortunes depend heavily on the banks and that movement in bank shares were in turn driven by interest rate expectations.

Also discussed was that instead of lower interest rates driving stocks higher, it was expectations of higher rates which were thought to translate to higher bank earnings and through to higher share prices.

On Wednesday, the index jumped 24.11 to 3,236.15 driven by large rebounds in the three banks, their gains accounting for about 17 points. Heightened activity in the banks and also Mandarin Oriental mean…