SINGAPORE stocks extended rally on Tuesday (Aug 20) as investors await eagerly the Republic’s July inflation data and Federal Reserve chair Jerome Powell’s keynote speech.
The Straits Times Index (STI) gained 0.4 per cent or 14.75 points to 3,370.31. Across the broader market, gainers beat losers 313 to 231 after 904.2 million securities worth S$969 million changed hands.
Vasu Menon, managing director of investment strategy of OCBC, highlighted that global stock markets appear to have turned the corner: “The MSCI All Country Global Index has rallied since Aug 5 after the Bank of Japan backtracked into dovish terrain and because some US data like jobless claims and retails sales turned out to be better than expected and allayed fears of a recession.”
Japan’s Nikkei 225 climbed 1.8 per cent, while South Korea’s Kospi rose 0.8 per cent.
“The market has largely priced in a 25-basis point September Fed rate cut, so if Powell signals this, it won’t come as a surprise. What markets will be keen to know is whether Powell expresses concerns about the economy and labour markets,” said Menon. He also noted that if Powell expresses worries about the labour market on Friday, market sentiment could be further boosted as this may imply consecutive rate cuts this year.
However, Chinese stock markets were in the red after the People’s Bank of China kept the August benchmark lending rates unchanged on Tuesday. This is seen as a move to save the shrinking profit margins of the country’s financial institutions.
The Shenzhen Stock Exchange Composite Index lost 1.4 per cent, while Hong Kong’s Hang Seng Index declined 0.3 per cent.
On the STI, Sats was the top gainer, rising 3.5 per cent or S$0.11 to S$3.22.
CapitaLand Integrated Commercial Trust was at the bottom of the table. It shed 2.3 per cent or S$0.05 to S$2.08 on an ex-distribution basis.
