Singapore stocks track regional gains; STI up 1.2%

[SINGAPORE] Shares on the local bourse ended higher on Wednesday (Aug 13), following three consecutive sessions of declines. The rebound came as regional markets also closed higher, buoyed by the latest US inflation data that raised expectations that the Federal Reserve would cut interest rates next month.

The benchmark Straits Times Index (STI) rose 1.2 per cent or 52.04 points to close at 4,272.76.

The top gainer on the index was (CDL), which rose 7.1 per cent or S$0.45 to S$6.80. At the bottom of the index was Wilmar International, which slid 1 per cent or S$0.03 to S$2.94, despite having reported a 2.6 per cent rise in net profit to US$594.9 million for the first half ended Jun 30.

The three local banks gained ground on Wednesday. DBS climbed 1 per cent or S$0.49 to S$51.45, UOB was up 0.9 per cent or S$0.32 to S$36.19 and OCBC rose 0.4 per cent or S$0.06 to S$16.81.

Across the broader market, gainers edged out losers 391 to 185, after 1.9 billion securities worth S$2 billion were traded.

Elsewhere in the region, key indices ended in the black. South Korea’s Kospi rose by 1.1 per cent, Japan’s Nikkei 225 gained 1.3 per cent, the FTSE Bursa Malaysia KLCI climbed 1.2 per cent, and Hong Kong’s Hang Seng Index saw the biggest increase, up 2.6 per cent.

These regional gains come amid US consumer prices rising at a solid monthly rate of 0.2 per cent. This was “largely in line with expectations”, leading to unchanged headline and slightly higher core inflation rates than in the previous month, said David Kohl, chief economist at Julius Baer.

Headline inflation stayed at 2.7 per cent, while core inflation, which excludes volatile food and energy prices, accelerated from 2.9 per cent in May to 3.1 per cent in June.

Kohl noted that prices of items potentially affected by higher tariffs, such as apparel and electronics, have gone up slightly in the US.

“These scattered signs suggest that tariffs are driving up the prices of a number of goods,” he said, adding that inflation remains closer to 3 per cent than to the US Federal Reserve’s target of 2 per cent.

“We expect more signs of slowing demand and a softer labour market in the coming weeks,” he said.

In the absence of significant tariff-induced inflation spikes and with a rather gradual and transitory upside risk to inflation from tariffs, Kohl said the Federal Reserve is most likely to resume its rate cuts at the next Federal Open Market Committee meeting in September.