Singapore shares set for an eight-day rally; Asia FX muted
Singapore equities were set for an eighth straight session of gains on Thursday, marking their best winning streak since November 2022, as cooling inflation and demand for defensive stocks supported the benchmark index.
The country's low baseline reciprocal tariff of 10%, along with a construction boom, falling interest rates, and increased fiscal support, will help cushion the impact of the trade war, Maybank analysts said.
The island-state also reported its lowest core inflation print in four years on Wednesday, reflecting lower prices of household goods and utilities ahead of a national election.
Gains in Singapore stocks are likely driven by the market's safe-haven appeal amid global trade volatility, with investors shifting toward high-yield sectors like telecommunications, utilities, and defence, Phillip Securities Research analyst Zane Aw said.
Currencies in the region were trading in a tight range, while a relief rally in stocks lost momentum after mixed signals on China tariffs by U.S. President Donald Trump's administration.
Shares in Taipei fell 0.8% after a massive 4.5% gain on Wednesday while equities in South Korea and Thailand dropped 0.1% and 0.2%, respectively. Stocks in Philippines and Indonesia dropped 0.2% each.
Among currencies, the South Korean won was the top loser, dropping 0.6% against a steady U.S. dollar.
The Thai baht, Taiwan dollar and the Indonesian rupiah were all about 0.1% lower.
Elsewhere, the view on Malaysia was more upbeat as rate cut bets mounted after it reported weaker-than-expected gross domestic product last week, coupled with the general unease around trade.
Citigroup continued to see a 30% chance of the Malaysian central bank cutting interest rates by 25 basis points in May and July each, it said in a note.
"Despite fundamental support for an arguably undervalued ringgit, tariff headwinds argue for willingness to allow ringgit as a shock absorber."
The Malaysian central bank governor said the nation would need to revise its annual growth forecast downward due to tariff and trade uncertainties.
The country faces a 24% tariff in July on its exports to the U.S. unless a deal is struck between the two countries.
HIGHLIGHTS:
** Indonesia 2025 growth seen around 5% despite trade tensions, finance minister says
** Singapore's high-yield stocks gain from tariff-induced flight to safety
** Philippines stands to benefit from US tariff shake-up, but must address constraints, study shows - Reuters
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