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STI rises 0.63% on US debt-ceiling optimism, upbeat macro data

SINGAPORE – Upbeat data out of the United States and easing fears over the debt-ceiling crisis spurred overnight gains on Wall Street and gave regional markets a welcome boost as well.

The Straits Times Index advanced 20.04 points or 0.63 per cent to 3,202.59 and ended a choppy week up 0.2 per cent. There were 1.17 billion shares worth $979.11 million traded, with losers outstripping gainers 278 to 262.

Gains here were mostly reflected in key gauges across the region, although Hong Kong and China bucked the trend to finish lower.

Negotiations on a US debt ceiling deal appear to be progressing, with a possible vote as soon as next week. Risks that the talks could break down still linger, but markets are showing little fear over that – for now at least.

“Every step forward at a potential agreement on raising the US debt ceiling is fuelling the Wall Street indices with optimism,” said brokerage Phillip Nova.

The decline in weekly jobless claims is the latest number fuelling hopes for a soft-landing in the US economy

IG market analyst Yeap Jun Rong cautioned that “lurking in the backdrop” are expectations for another 25 basis-point hike in rates by the US Federal Reserve in June. 

Mr Yeap added: “More hawkish comments from Fed officials overnight continue to challenge expectations for a June rate pause, and this may be the central focus for markets once the hype around US debt ceiling optimism passes.”

On the home front, the banking trio DBS, UOB and OCBC led the gains, while  Singapore Airlines continued to draw interest since it reported bumper full-year results. The share added 2.8 per $6.26.

Marco Polo Marine was the day’s most active, with 132 million shares exchanging hands. The counter shot up 6.25 per cent to 5.1 cents. Last week, the firm reported a 61 per cent drop in net profit on the back of a two-fold jump in revenue. THE BUSINESS TIMES