STI finishes 1.28 points higher

Singapore shares have reversed their earlier loss on 22 September, as the US Federal Reserve increased interest rates and signaled more hikes ahead.

The STI finished strong at 3,263.07, a 0.04% increase, after falling 0.39% during the early morning trade. Losers were at 257, and gainers were at 230, as 1.02 billion securities worth a whopping S$1.09 billion changed hands.

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According to Selena Ling, OCBC chief economist and head of treasury research and strategy, the “tilt towards risk-off has dominated early market performance.”

Among those that were heavily traded in terms of value were banking stocks. The three counters trimmed losses towards the trading day with OCBC at S$12.31 (decreased 0.32%), UOB at S$27.53 (decreased 0.54%), and DBS at S$33.52.

For REITs that are known to be sensitive to interest rate fluctuations, the impacts were mixed. For example, Ascendas REIT increased 0.36%, while Suntec REIT and Mapletree Logistics Trust decreased by 0.6% each.

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In the region, most trades were in the red, with MSCI’s broadest index of Asia-Pacific shares outside Japan reaching its lowest since May 2020. South Korea’s Kospi Index also finished at red (down 0.63%), its lowest close since 15 July 2022. Meanwhile, Hong Kong’s Hang Seng Index decreased by 1.61%.

On Thursday, two other Asian central banks announced hikes, namely the Bangko Sentral ng Pilipinas, and Bank Indonesia.

According to the chief market strategist for the Asia Pacific at JP Morgan Asset Management Mr Tai Hui, a strong dollar value is set to persist as the US Fed continues the rate hikes. However, the tightening efforts of Asian central banks are expected to limit the depreciation of regional currencies.

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