Singapore's equity market staged a robust advance on Thursday, with the Straits Times Index (STI) gaining 1.3% to close at 5,001.56. This move propelled the benchmark back above the psychologically significant 5,000-point threshold, a level not seen in recent sessions. The session's performance was bolstered by strength in the banking sector and a standout rally for a major shipbuilder.
Index Performance and Key Movers
The broader iEdge Singapore Next 50 Index also finished in positive territory, adding 0.6%. Trading activity resumed after a holiday pause, with regional participation remaining patchy due to lingering Lunar New Year closures across parts of Asia. On the Singapore Exchange, advancing issues outnumbered decliners by a count of 316 to 142. Total turnover reached 1.4 billion securities valued at S$2.1 billion.
Yangzijiang Shipbuilding emerged as the top performer on the STI, soaring 4.9% to S$3.64. The banking trio, a core component of the index, contributed significantly to the gains. DBS Group Holdings advanced 1.3% to S$57.62, Oversea-Chinese Banking Corporation (OCBC) rose 2.3% to S$21.59, and United Overseas Bank (UOB) edged up 0.7% to S$38.66. In contrast, Mapletree Logistics Trust, a real estate investment trust, declined 1.5% to S$1.28.
Global Drivers and Market Sentiment
Investors navigated a complex web of international cues. In the United States, technology stocks experienced volatility, though news of Nvidia's agreement to supply artificial intelligence chips to Meta Platforms provided a layer of optimism. "Economic data signalling the continued buoyancy of AI-related capital expenditures is propelling animal spirits on Wall Street," noted Jose Torres, an economist at Interactive Brokers.
Commodity markets were active, with oil prices firming as traders monitored escalating tensions between the U.S. and Iran. Brent crude futures hovered near $71 per barrel. Analysts highlighted the geopolitical risk premium being priced into the market. "Rising U.S.-Iran tensions are adding a layer of uncertainty, and we’re already seeing that play out in higher oil prices," stated Matt Britzman, senior equity analyst at Hargreaves Lansdown. Rabobank strategist Michael Every warned, "the balance of risks now tilts to a U.S. strike after market close Friday." Gold prices held steady but remained below the $5,000-an-ounce mark.
Monetary Policy and Currency Markets
The U.S. dollar held near recent highs following the release of minutes from the latest Federal Reserve meeting. The minutes revealed that officials showed little appetite for imminent interest rate cuts, with some even suggesting further hikes could be possible if inflation proves persistent. This hawkish tilt has reinforced expectations that U.S. rates will remain elevated for longer, a dynamic that typically supports the dollar and pressures yield-sensitive assets globally.
Regional Market Action
Other major Asian markets posted gains, partly supported by the bounce in U.S. tech shares. Japan's Nikkei 225 index rose 0.6%, while South Korea's Kospi surged 3.1%. Malaysia's KLCI added 0.6%.
Outlook and Key Risks
Despite the day's rally, analysts caution that Singapore's market faces near-term hurdles. A sustained climb in oil prices or stronger-than-expected U.S. economic data that pushes bond yields higher could threaten to unwind the gains. Rising interest rates typically compress valuations for REITs and other dividend-focused stocks, while also potentially dampening broader risk appetite.
Market participants are now looking ahead to a slate of key events. The U.S. Personal Consumption Expenditures (PCE) report, the Fed's preferred inflation gauge, is due on Friday. Additionally, weekly jobless claims data, commentary from several Federal Reserve officials, and earnings from retail giant Walmart are on the docket. Movements in crude oil and any unexpected geopolitical developments will also be critical in steering sentiment for Singapore's next trading session.
"So on any given day, the bias switches very fast and that’s a great indicator of overall investor nervousness," observed Kim Forrest, founder and chief investment officer at Bokeh Capital, encapsulating the fragile and reactive nature of current market sentiment.
