Singapore shares opened on a positive note on Thursday, with the benchmark Straits Times Index (STI) rising despite overnight losses on Wall Street after the US Federal Reserve signalled a more hawkish stance on interest rates.
At 9.05am, the STI gained 59.60 points, or 1.16%, to 5,176.46, extending gains from the previous session. Market breadth remained negative, however, with decliners outnumbering advancers 97 to 65.
Trading volume amounted to 52.16 million shares worth S$137.42 million.
Among the index heavyweights, DBS Group Holdings edged up 0.17 point, or 0.26%, to S$65.18. OCBC Bank traded at S$24.70, while United Overseas Bank stood at S$39.21. Singtel changed hands at S$4.38 and SATS was at S$4.22.
The firmer opening came after US equities retreated sharply overnight as investors reassessed the outlook for interest rates under new Federal Reserve chairman Kevin Warsh.
The Dow Jones Industrial Average fell 0.98%, while the S&P 500 and Nasdaq Composite declined 1.21% and 1.34%, respectively, after the Fed left rates unchanged at 3.50%-3.75% but projected that borrowing costs could rise later this year to combat inflation.
Warsh, who chaired his first policy meeting, reiterated the central bank’s commitment to price stability and announced a broad review of monetary policy operations, prompting futures markets to increase bets on a possible rate hike as early as September.
In the derivatives market, MSCI Singapore Index Futures for June stood at 478.70, while USD/SGD Futures for July were quoted at 1.2817.
Investors are expected to remain cautious as they digest the implications of tighter US monetary policy and monitor developments surrounding the fragile ceasefire agreement between the United States and Iran.
