Singapore Stocks Defy Broader Market Declines Amid Bond Sell-Off Fears

The Singapore stock market ended higher on Wednesday despite a slump in Asian markets, driven by a global bond sell-off and inflation fears. The benchmark Straits Times Index (STI) rose 0.6% or 33.74 points to finish at 5,744.11.

City Developments Ltd led the gainers on Singapore's blue-chip index, increasing 2.1% or S$0.18 to S$8.58. The three local banks also ended higher: DBS gained 0.9% or S$0.69 to end at S$77.60, OCBC rose 1.6% or S$0.51 to S$31.85, and UOB was up 0.8% or S$0.35 at S$41.77.

However, the STI's gain came against a backdrop of declining regional indices: Hong Kong's Hang Seng Index fell 0.1%, Japan's Nikkei 225 dropped 2.9%, and South Korea's Kospi was down 4%. Only Malaysia's FTSE Bursa KLCI advanced, rising 0.5%.

The global bond sell-off reflects inflation expectations and fiscal policy risks following renewed fighting in the Middle East, according to Neil Wilson, UK investor strategist at Saxo Markets. He noted that markets are leaning towards a September rate hike due to the escalation of conflict and the more hawkish tone from US Federal Reserve chair Kevin Warsh.