Singapore’s STI, Asia markets rise after US court blocks Trump’s reciprocal tariffs

[SINGAPORE] Singapore stocks rose on Thursday (May 29) morning, after a US trade court on Wednesday blocked US President Donald Trump’s “Liberation Day” tariffs from going into effect.

As at 9.12 am, the Straits Times Index (STI) opened 0.2 per cent or 7.56 points higher at 3,919.48. Across the broader market, gainers outnumbered losers 106 to 56 after 102.5 million securities worth S$161 million changed hands.

On Wednesday, the trade court ruled that the president overstepped his authority by imposing across-the-board duties on imports from nations that sell more to the US than they buy.

Among Singapore stocks, the trio of local banks were mixed at the open. DBS shed 0.7 per cent or S$0.30 to S$44.85. UOB declined 0.4 per cent or S$0.15 to S$35.80. OCBC rose 0.3 per cent or S$0.05 to S$16.38.

Golden Agri-Resources was the most actively traded counter by volume, rising 2.1 per cent or S$0.005 to S$0.245 after 11.5 million shares changed hands. Other briskly traded counters included Genting Singapore, which opened flat at S$0.70, and taxi operator ComfortDelGro, which remained unchanged at S$1.42.

Energy and oil company Rex International opened 3.2 per cent or S$0.004 higher at S$0.128 with 8.1 million securities transacted.

Other Asia markets also rose in response in early morning trade, with Japan’s Nikkei jumping 1.3 per cent and South Korea’s Kospi rising 1.4 per cent. Australia’s ASX 200 edged marginally up by 0.1 per cent.

US futures jumped, with Dow futures soaring more than 500 points, and those tied to the S&P 500 rising 1.5 per cent.

The Manhattan-based Court of International Trade said the US Constitution gives Congress exclusive authority to regulate commerce with other countries that is not overridden by the president’s emergency powers to safeguard the US economy, Reuters indicated.

“The court does not pass upon the wisdom or likely effectiveness of the president’s use of tariffs as leverage. That use is impermissible not because it is unwise or ineffective, but because (federal law) does not allow it,” a three-judge panel said in the decision, based on the Reuters report.

Thereafter, the Trump administration filed an appeal to a US federal court ruling on Wednesday that sought to block most of the US president’s sweeping import tariffs from going into effect, AFP reported.

Maybank analysts have noted that the strong optimism in the markets may have been driven in part by “solid” Nvidia earnings that adds to better macroeconomic sentiment. However, they caution that this alone is not enough to sustain higher levels of market optimism.

They remain cautious about the currency space due to uncertainty of the situation and possibility that the ruling could be overturned.