Stock exchange in Singapore could potentially face resistance at approximately 4,300 points.
Asian Markets Remain Optimistic Amid Interest Rate Outlook
The Asian stock market ended a three-day slide on Wednesday, with the Singapore stock market finishing sharply higher. The STI jumped 52.04 points or 1.23 percent to finish at 4,272.76. The optimistic outlook for Asian markets on Thursday remains, as investors continue to show confidence that interest rates may not rise aggressively, despite some hawkish signals from central banks.
The lead from Wall Street is upbeat as the major averages opened higher on Wednesday and largely spent the day in positive territory. The S&P 500 rose 20.82 points or 0.32 percent to end at a record 6,466.58. The Dow surged 463.66 points or 1.04 percent to finish at 44,922.27. The NASDAQ added 31.24 points or 0.14 percent to close at a record 21,713.14.
The current outlook for Asian markets is supported by solid earnings reports in the region, ongoing trade negotiations, and the expectation that the U.S. Federal Reserve may delay or moderate further rate hikes due to mixed inflation and PMI data. CME Group's FedWatch Tool is currently indicating a 93.8 percent chance the Fed will cut rates by 25 basis points in September.
Recent data saw Japan’s inflation easing to 3.1% in July with stable core inflation, which is positive for market stability in the region. Strong U.S. PMI readings at 55.4 have initially raised hawkish rate hike expectations, but markets are watching for any signs that the Fed might delay rate increases given inflation slightly exceeding the 2% target.
Asian market sentiment has benefited from positive corporate earnings and trade deal hopes, providing bullish momentum. U.S. dollar strength and higher yields have pressured some currencies like the Japanese yen, but the overall risk appetite remains supportive of equities in Asia.
In the local market, active stocks saw mixed performances. CapitaLand Ascendas REIT jumped 1.87 percent, CapitaLand Integrated Commercial Trust was up 0.45 percent, CapitaLand Investment rallied 2.55 percent, City Developments skyrocketed 7.09 percent, Comfort DelGro gathered 0.64 percent, DBS Group advanced 0.96 percent, Genting Singapore climbed 1.36 percent, Hongkong Land sank 0.49 percent, Keppel DC REIT improved 1.31 percent, Keppel Ltd strengthened 1.68 percent, Mapletree Pan Asia Commercial Trust rose 0.75 percent, Mapletree Industrial Trust increased 1.01 percent, Mapletree Logistics Trust added 0.87 percent, Oversea-Chinese Banking Corporation perked 0.36 percent, SATS accelerated 3.12 percent, Seatrium Limited gained 0.85 percent, SembCorp Industries picked up 0.47 percent, Singapore Technologies Engineering spiked 3.23 percent, SingTel soared 3.57 percent, United Overseas Bank collected 0.89 percent, UOL Group expanded 1.56 percent, Wilmar International slumped 1.01 percent, Yangzijiang Financial surged 5.05 percent, Yangzijiang Shipbuilding fell 0.34 percent, DFI Retail Group and Thai Beverage were unchanged.
The International Energy Agency projected oversupply in the market this year due to surging supply from oil producers. However, crude oil prices fell on Wednesday, with West Texas Intermediate crude for September delivery down $0.55 or 0.87 percent at $62.62 per barrel.
In summary, while cautious about potential rate hike impacts, Asian investors are generally optimistic on Thursday as regional earnings and trade developments help balance concerns about monetary tightening. The Straits Times Index is currently just above the 4,270-point plateau. The global forecast for Asian markets remains positive on continued optimism over the outlook for interest rates.
[1] [Source 1] [2] [Source 2] [3] [Source 3]
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