Singapore stocks rebound as US pauses global tariffs

[SINGAPORE] On April 10, Singapore's benchmark stock index recovered from its biggest slump in 25 years after US President Donald Trump announced a 90-day halt on global tariffs that had gone into effect less than 24 hours earlier. China was, however, exempt from the tariff moratorium.

The exemption of China from the tariff reprieve underscores the ongoing tensions between the world’s two largest economies, which have been locked in a trade dispute since 2018. Analysts warn that the exclusion could further strain bilateral relations, with potential ripple effects across global supply chains reliant on Chinese manufacturing.

The Straits Times Index (STI) jumped 8.2 percent as trading began, following the S&P 500, which closed up 9.5% overnight in New York. The Dow index finished 7.9 percent higher, while the Nasdaq surged 12.2 percent for its highest day in 24 years.

Market strategists attribute the sharp rebound to a combination of short-covering and renewed investor optimism, though caution remains as geopolitical uncertainties persist. "The relief rally is strong, but sustainability depends on whether the tariff truce translates into longer-term stability," said a senior economist at a local bank.

The STI reduced its gains and was up 5.7% by 10.15 a.m. The following are the top intraday gainers on the STI so far on April 10:

Sats

Sats was the top gainer on the Singapore blue chip index, jumping as much as 9.8% to $2.70 after the market opened on April 9. When Mr Trump's tariffs were first announced, the air cargo and catering industry suffered a setback, and it continued to decline as traders around the world tried to rearrange their supply chains and logistics arrangements.

Industry experts note that Sats’ rebound reflects broader optimism in the aviation sector, which had been battered by fears of reduced cargo volumes due to trade barriers. However, lingering fuel price volatility and potential disruptions in global air freight remain key concerns.

DBS, UOB, OCBC

When the market opened, the three local banks were up an average of 9%. UOB led the rally, rising 9.3 percent from the previous day's closing to $33.87 at 9.30 a.m. DBS surged 9.2 percent and is presently trading above $40 at $40.58. OCBC gained 8.6 percent to $15.66. The banks' bounce coincided with the release of documents from the US Federal Reserve's mid-March meeting on April 9.

The minutes revealed that, while Fed officials are concerned that Mr Trump's tariffs may harm economic growth, they are not in a hurry to lower interest rates since they expect higher tariffs to raise inflation. Interest rate reduction reduce banks' net interest margins, putting pressure on net interest income.

Regional banking peers, particularly in Hong Kong and Malaysia, also saw gains, suggesting a broader sectoral recovery. However, analysts highlight that the Fed’s cautious stance on rate cuts may limit upside potential for financial stocks in the near term.

Seatrium

Seatrium was up 8.3% to $1.82. The constructor of offshore oil and gas and renewables platforms, as well as complicated support vessels for the industry, suffered losses because many of its clients are situated in the United States. On April 5, baseline duties of 10% were imposed on Singaporean goods imported into the United States.

Yangzijiang Shipbuilding

Despite the rising tit-for-tat trade conflict between the United States and China, the China-based shipbuilder increased by 8% to $2.02. Mr Trump increased the duty on Chinese imports into the US from 54% to 125% on April 9, effective immediately, following China's announcement that tariffs on US goods entering its borders would jump to 84% from 34% on April 10.

The resilience of Yangzijiang’s stock may be linked to its strong order book, which includes contracts from non-US markets. However, the broader shipbuilding industry remains vulnerable to trade policy shifts, particularly as China’s dominance in global ship production faces increasing scrutiny from Western economies.

ST Engineering

ST Engineering increased 6.4% to $6.69. The stock, which touched an all-time high of 6.91 on March 20, plummeted to 6.22 after tariffs kicked in for Singapore on April 5, triggering warnings from Singapore's officials of a possible economic downturn. On April 10, ST Engineering announced that it has been awarded a $1.4 billion contract to supply rail services for a planned MRT line in Taiwan.

The contract win underscores ST Engineering’s diversification strategy, reducing reliance on US-centric revenue streams. Market watchers view such deals as critical for Singaporean firms navigating an increasingly fragmented global trade landscape.