Singapore banks lift STI to five-month high as Asian markets wobble
Singapore's benchmark index rose 1.1% on banking strength, even as most Asian markets slipped on crude price concerns and geopolitical risks.
Singapore stocks extended their rally on Friday, powered by a strong showing from the city-state's major lenders, even as most other Asian markets struggled under the weight of rising oil prices and persistent Middle East tensions.
The Straits Times Index climbed 1.1%, lifting MSCI's gauge of ASEAN equities by 0.5% to its highest level in over five months. In contrast, MSCI's broader emerging Asia index, which is heavily weighted toward South Korea and Taiwan, slipped 0.2%.
Oversea-Chinese Banking Corp hit a record high after raising its loan-growth forecast and posting record quarterly profit that beat expectations. DBS Group, Southeast Asia's largest lender by assets, also touched an all-time peak. Together with United Overseas Bank, the three lenders account for roughly 32% of the benchmark index.
"Singapore's outperformance has been driven by the continued strength of its financial sector, with robust Q2 earnings reports released by the major banks," said Gary Tan, portfolio manager at Allspring Global Investments. He noted that the results reinforce confidence in the banks' earnings resilience, capital returns and balance sheet strength, underscoring the market's defensive appeal amid regional volatility.
Elsewhere, sentiment was fragile. South Korea's KOSPI reversed early gains to fall 1.2%, while Taiwan's benchmark swung between gains and losses before settling 0.5% lower. For the week, Seoul was down 5.3% and Taipei 2.8% on concerns about the durability of hefty AI capital expenditure.
Crude prices rose as Iran reviewed a preliminary bill that would bar U.S., Israeli and other "hostile" vessels from the Strait of Hormuz, a critical oil shipping lane. Philippine shares slipped as much as 0.9% before stabilising, and Thai stocks dipped 0.3%. Jakarta, however, climbed 0.8%, on track for a fifth straight weekly gain of 2.6%.
Currency moves were mostly muted, with MSCI's emerging market currency index flat. The South Korean won was the standout, gaining 0.5%.
On the data front, the Philippine economy grew 2.3% in the second quarter, missing analyst forecasts. Traders were also watching U.S. non-farm payrolls data due later in the day for clues on the Federal Reserve's interest rate path.