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Thu Nov 29, 2018 – 11:33
SINGAPORE stocks rose sharply on Thursday, with the Straits Times index rising 0.9% to 3,121.63 just before lunchtime at 11:04, after a spate of dubious Fed comments that have allowed to lift all boats.
There are more winners than losers between 183 and 106, with local banks among the top winners. The DBS rose 1.84% to 24.31 Singapore dollars, while the UOB rose 1.65% to 25.23 Singapore dollars.
Reits also rose, posting gains of over 1%. Ascendas Reit rose by 1.16% to 2.61 Singapore dollars and ParkwayLife Reit 1.53% to 2.66 Singapore dollars.
Overnight, US stocks recorded their largest intra-day rally since March, after the dovish speech of US Federal Reserve Chairman Jerome Powell last night. He said current interest rates were "just below neutral", prompting market participants to lower expectations of a further rate hike from 2019, although a rise is expected in December.
Although we have solved a major problem, Asian markets still have to face Friday's G20 summit, widely seen as an opportunity for China and the United States to break the negative spiral of financial markets.
Margaret Yang, a member of the CMC, said that since it was a "delicate meeting of major stakes between the leaders of the two countries, no negative surprise like that observed at the previous summit of the Apec would probably not happen again in Buenos Aires.
She believes that the markets have not yet fully taken into account the possibility of a break in negotiations and new tariffs on all remaining Chinese products. As a result, the stock markets will suffer the consequences if negotiations break down and result in a full pricing scenario.
Pioneers in the region had started with strong starts of around 0.9% in Sydney and Tokyo, but markets are expected to move cautiously for the rest of the day.
On the currency side, the US dollar index reached its peak of the last two weeks of 97.30, plunging by about 0.5% to 96.77 on the prospect of a lower US rate l next year. The euro rebounded 0.68% against the greenback at 1.136 this morning, while the pound sterling gained 0.65% against the US dollar at around 1.282. The pound is expected to remain moderate before the December 11 vote on Brexit.
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