THE Singapore stock market was buoyant on Thursday (Sep 19) after the US Federal Reserve announced a 50-basis-point cut to the federal funds rate overnight.
The Straits Times Index (STI) rose to its highest level since November 2007, rising 1.1 per cent or 40.76 points to 3,633.18.
Of the 30 counters on the STI, just three counters were flat while 27 were in the black.
CapitaLand Investment was the top gainer, rising 4.5 per cent or S$0.13 to S$3.05.
Real estate investment trusts (Reits), widely seen as rate-cut beneficiaries, were mostly in the black as well, with Mapletree Pan Asia Commercial Trust being the top gainer among them. It closed up 2.7 per cent or S$0.04 at S$1.51.
The three locally listed banks also ended the day in positive territory. UOB gained 0.6 per cent or S$0.18 to S$32.73, while OCBC was up 0.8 per cent or S$0.12 at S$15.46 and DBS rose 1.1 per cent or S$0.40 to close at S$38.50.
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Across the broader market, gainers beat losers 415 to 210 after 1.4 billion securities worth S$1.6 billion changed hands.
Stephen Innes, managing partner of SPI Asset Management, said that Asia’s markets are “riding high” as the Fed’s “jumbo” rate cut would make it easier for central banks across the region to cut rates, potentially fuelling growth and boosting stock-market valuations.
“With the Fed taking the plunge, these more cautious central banks may finally feel encouraged to join the rate-cut party.
“The hesitation, of course, is due to the risk of currency depreciation. Lowering rates ahead of the Fed can devalue national currencies, making imports more expensive and potentially reigniting inflation,” he added.
Regional markets were in the black on Thursday. Hong Kong’s Hang Seng Index rose 2 per cent, while Japan’s Nikkei 225 Index gained 2.1 per cent and South Korea’s Kospi was up 0.2 per cent.
