Singapore shares close higher on Monday; STI up 0.5%

SINGAPORE stocks ended higher on Monday (Jan 6) despite declines across the region amid the Federal Reserve’s hawkish stance.

The Straits Times Index rose 0.5 per cent or 20.01 points to 3,821.84. Across the broader market, gainers barely beat losers 263 to 258 after 945.4 million securities worth S$854.5 million changed hands.

Keppel was the top gainer on the index, gaining 1.7 per cent or S$0.12 to S$7. CapitaLand Investment fell the most, down 1.5 per cent or S$0.04 at S$2.64.

All three local banks closed in positive territory. UOB rose 0.6 per cent or S$0.22 to S$36.80, OCBC climbed 1.3 per cent or S$0.22 to S$16.79 and DBS was up 0.8 per cent or S$0.33 at S$43.95.

Across the region, key indices were mostly in the red.

Japan’s Nikkei 225 index shed 1.5 per cent, Hong Kong’s Hang Seng Index declined 0.4 per cent and the FTSE Bursa Malaysia KLCI was down 0.2 per cent. Meanwhile, South Korea’s Kospi gained 1.9 per cent.

This comes as global markets grapple with the US Fed’s hawkish stance, as well as concerns surrounding Donald Trump’s inauguration and the potential policy announcements he may make on tariffs, immigration and taxes.

Fed officials appeared to express caution regarding further rate cuts over the weekend as they imply that there is still some way to go before they can bring inflation down to the 2 per cent target, Maybank Investment Banking Group analysts noted.

They said: “It started off with (Richmond Federal Reserve president Thomas) Barkin, who said that there (is) ‘more upside risk than downside risk’ to inflation and noted his preference to keep restrictive rates for longer. He also appeared to believe in labour market strength, as he mentioned that it is ‘more likely to break towards hiring than towards firing’.

“Under such circumstance, (the) dollar strength looks like it would stay supported although some caution (for a) pullback cannot be ruled out after a strong run,” they added.