Singapore market trends Thursday: Shares may track Wall Street rally after dovish Fed signal

Singapore’s Marina Bay SandsSingapore’s Marina Bay Sands

Singapore’s shares may rise on Thursday after comments from U.S. Federal Reserve chief Jerome Powell on Wednesday were taken as dovish by the market, spurring a strong rally on Wall Street and weighing on the U.S. dollar.

“The prospect of a Fed pause was just what the equity market doctor ordered and boosting investor sentiment. Powell’s dovish pivot reduces nagging concerns about vigorous interest rate hikes while providing the market with one of the best holiday gifts, a significant bounce in global equity markets,” Stephen Innes, head of Asia Pacific trading at OANDA, said in a note on Thursday.

Powell said that the central bank’s benchmark rate was “just below” where it estimated the “neutral” level would be. A neutral level would neither stimulate nor slow the economy. The comments, made in a speech Wednesday at the Economic Club of New York, were taken by market as a signal that the Fed would pause its hiking cycle as it marked a shift from his comments in October that rates were a “long way from neutral.”

Indexes

Japan’s Nikkei 225 index was up 1.05 percent at 8:10 A.M. SGT, while South Korea’s Kospi was up 1.11 percent at 8:15 A.M. SGT.

Singapore’s Straits Times Index ended Wednesday up 0.13 percent at 3094.48; November futures were at 3094 on Wednesday, while December and January futures were at 3092 and 3094 respectively.

Hong Kong’s Hang Seng Index rose 1.33 percent to end at 26,682.561 on Wednesday, while China’s CSI 300 was up 1.33 percent at 3178.933.

Malaysia’s KLCI edged up 0.09 percent to end Wednesday at 1686.55, while Indonesia’s IDX Composite was down 0.37 percent at 5991.25.

The Dow Jones Industrial Average jumped 2.50 percent to end at 25,366.43, the Nasdaq Composite was up 2.95 percent at 7291.592 and the S&P 500 gained 2.30 percent at 2743.79. Futures for the three indexes were nearly flat in early trade.

Oil

Nymex WTI crude oil futures for January were up 0.70 percent at US$50.64 a barrel at 8:03 A.M. SGT, while ICE Brent crude oil futures for January were down 2.41 percent at US$58.76 a barrel at 6:59 A.M. SGT, according to Bloomberg data.

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