Shares on the Singapore bourse rose on Tuesday (Mar 18) amid gains in regional indices, buoyed by better-than-expected US retail sales data, as markets await a US Federal Reserve decision later this week.
US retail sales for February rose 0.2 per cent, marking an improvement from January’s 1.2 per cent decline. While the Fed is widely expected to keep interest rates unchanged, the focus will be on chair Jerome Powell’s comments about the impact of tariff uncertainty on the US economy.
This positive sentiment was mirrored in Asian markets, with regional stock indices ending higher on Tuesday. Hong Kong’s Hang Seng Index rose 2.5 per cent, Japan’s Nikkei 225 ended 1.2 per cent higher and the Bursa Malaysia Kuala Lumpur Composite Index gained 1 per cent. South Korea’s Kospi was up 0.1 per cent.
Back home, the benchmark Straits Times Index (STI) advanced 35.61 points or 0.9 per cent to close at 3,894.97. Across the broader market, gainers outnumbered losers 362 to 174, as 1.3 billion shares worth S$1.4 billion changed hands.
The top gainer on the index was offshore and marine specialist Seatrium, which rose 2.8 per cent or S$0.06 to S$2.18.
The biggest decliner on the index was CapitaLand Integrated Commercial Trust. The counter slid 0.9 per cent or S$0.02 to S$2.10. The trust’s manager on Monday said deputy chief executive officer Tan Choon Siang would take on the roles of chief executive officer and executive director from May 1.
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Meanwhile, the trio of local banks ended higher. DBS rose 1.5 per cent or S$0.67 to S$45.03; UOB was up 1 per cent or S$0.37 at S$37.35; and OCBC gained 1.5 per cent or S$0.25 to close at S$16.86.
Yeap Jun Rong, market strategist at IG, said in a note on Tuesday that while the US retail sales increase of 0.2 per cent fell short of the 0.6 per cent consensus, market participants found comfort in the stronger-than-expected 1 per cent jump in the gross domestic product-relevant “control group”, which alleviated concerns about a severe slowdown in consumer spending.
He noted that “while recession chatters may seem overblown for now, the US economy remains on a slowing trajectory, keeping valuations under close scrutiny”. The preference for relatively cheaper value stocks over growth stocks continues to be the favoured approach, he added.
Yeap also pointed out that the US dollar continues to weaken, pressured by softer US retail sales data, which has heightened expectations of a more dovish Fed.
“At the FOMC (Federal Open Market Committee) meeting this week, policymakers are widely expected to keep Fed funds rate unchanged, but will likely signal an increased openness to rate cuts in response to growth risks,” he said.
On the other hand, he sees China’s plans to strengthen domestic demand boosting broader sentiment. While policy support has been more structural than direct, these efforts “mark a step in the right direction, with room for more policy ramp-up further down the road”, Yeap added.
