STI breaks 4,900 amid expectations for Fed to hold rates steady

[SINGAPORE] The Straits Times Index (STI) broke new ground on Tuesday (Jan 27) morning and crossed the 4,900 threshold for the first time.

The benchmark index hit a historic record high of 4,912.46 in early trade, driven by gains made by its constituents – the 30 largest and most liquid companies on the Singapore Exchange (SGX).

Two of the three Singapore banks, which collectively form around 50 per cent of the STI by index weight, recorded gains of at least 1 per cent as at Tuesday morning. DBS was up 1.3 per cent at S$59.06 and OCBC rose 1 per cent to S$21.25. Meanwhile, UOB inched up 0.03 per cent to S$38.51.

Other STI constituents among the top traded SGX stocks included Singtel , which was up 2 per cent at S$4.55, with some 8.1 million shares changing hands. Chinese vesselmaker Yangzijiang Shipbuilding , which was up 1.2 per cent at S$3.35, and Wilmar International , which was 3 per cent higher at S$3.45, were also among the most heavily traded STI counters.

Real estate investment trusts (Reits) were also trading higher on Tuesday morning. CapitaLand Integrated Commercial Trust rose 0.9 per cent to S$2.38, Mapletree Industrial Trust climbed 1 per cent to S$2.12 and Keppel Reit jumped 0.5 per cent to S$0.985.

The gains come ahead of the US Federal Reserve’s two-day meeting this week, where the US central bank is expected to hold interest rates steady and halt its rate-cutting cycle. Several Fed officials have suggested that rates are now well-positioned to support employment while keeping downward pressure on inflation, after three consecutive cuts.

The STI, a barometer for the Singapore market, posted steady gains through 2025 and hit consecutive records in the year. As at Tuesday, it has risen 5.7 per cent in the year to date and close to 30 per cent over the past year.

Further gains could be on the horizon for the blue-chip barometer, which is forecast to outperform peers and hit 5,400 by the end of 2026, said a UOB Kay Hian report on Jan 23.

“We think that the Singapore market remains an attractive one for investors, with the STI outperforming its peer on a three, five and 10-year basis,” said the report, which highlighted tailwinds that are expected to continue supporting Singapore market outperformance.

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These include policy tailwinds for equities, arising from the deployment of the first tranche of Equity Market Development Programme funds and the future deployment of a second tranche of the funds.

Potential revival in the initial public offering market, a broadened mid-cap focus with the launch of the Singapore Next 50 index and an “anaemic Reits recovery” were also cited as tailwinds.