SINGAPORE — Singapore stocks raced to a record high on Tuesday after the city-state lifted its annual growth forecast on an AI-powered boost, while rising oil prices and fading peace-deal hopes kept Southeast Asian currencies under pressure.
Singapore's FTSE Straits Times Index rose as much as 1.3% to a record high of 5,774.21, putting the benchmark on track for a third straight session of gains.
The trade ministry raised its 2026 growth forecast for Singapore to 4.5%-5.5% from 2.0%-4.0% on a stronger-than-anticipated global artificial intelligence (AI) investment boom and a milder impact from the Iran war. The revision comes alongside a gross domestic product (GDP) expansion of 5.9% in the second quarter, higher than advance estimates.
"The growth upgrade is supportive for Singapore equities because it reinforces the earnings outlook for cyclical sectors and confirms that the economy is benefiting from stronger AI-related investment activity," said Gary Tan, a portfolio manager at Allspring Global Investments.
The data further amplifies appetite for Singapore's equities after three of its largest banks reported stronger profits, with their wealth management fees boosted by Asia's growing affluent population.
The Singapore dollar traded largely flat at 1.2799 per US dollar, faring better than peers across the region. It is up 0.5% this year so far, outperforming most of its Southeast Asian peers.
The Thai baht weakened to 33.0325 a dollar, while the Philippine peso shed as much as 0.6% to a one-week low of 61.079.
Oil prices traded at more than a one-week high after hopes of a peace deal between the U.S. and Iran diminished, piling pressure back onto energy-importing countries and their currencies.
The Indonesian rupiah lost as much as 0.4% to 17,822 per dollar, set to snap a four-session rally. The currency strengthened in the previous session, relaying largely favourable opinions on the nomination of insider Destry Damayanti as the sole candidate for the central bank governor role.
The appointment of Destry comes at a time when investors were apprehensive about investing in Indonesia due to anxiety over Indonesia's fiscal policy and central bank independence.
The rupiah is bearing the brunt of weakening confidence, slipping 6.4% year-to-date to become Asia's worst-performing currency. Jakarta stocks slipped 0.7% on Monday and were the weakest regional performers.
Tech-heavy benchmarks gained on the day, with bellwether South Korea's KOSPI rising 1.1% and Taiwan equities up 0.4%.
