Singapore shares close higher as banks rally in line with US banks
WALL Street's surprise rally on Wednesday in response to Donald Trump winning the US presidential election reverberated across the region on Thursday, though the reason behind it was difficult to fathom.
One of the explanations was that the volatility caused by the Trump win could lead the US Federal Reserve to avoid raising interest rates next month, though this was unlikely to be the case given that the US Federal Funds Futures market on Wednesday closed with an 82 per cent probability of a rate hike.
Other reasons forwarded were that Mr Trump had previously promised tax cuts and increased infrastructure spending, and that in his acceptance speech he indicated a possible softer stance towards trade partners.
Also possible was that Mr Trump had also said he would amend the Dodd-Frank Act, which regulates banks since after the US sub-prime crisis of 2008.
Whatever the case, the Straits Times Index jumped 44.21 points or 1.58 per cent to 2,834.09. The market recorded a turnover of two billion units worth S$1.56 billion and chalked up an advance-decline score of 310-124, excluding warrants.
Banks were the top gainers, led by DBS Bank's S$0.57 or 3.8 per cent surge to S$15.69 on volume of 17.6 million. DBS alone accounted for S$274 million or 17 per cent of dollar volume. On top of a global play on banks, observers said DBS stood to gain the most if interest rates were to rise.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Capital Markets & Currencies
China to facilitate Hong Kong IPOs and expand Stock Connect
Global equity funds see surge in outflows as rate cut hopes fade
Israel hits back, markets react; STI down 0.4%
Oil jumps, equities fall as Iran blasts fan Middle East tensions
Tokyo: Nikkei index tumbles 3% in morning trade
Singapore shares open higher on Friday; STI up 0.2%