Singapore stocks managed to push higher on Thursday, even as a spike in oil prices tied to fresh tensions in the Gulf region rattled broader markets. The Straits Times Index (STI), the main benchmark for Singapore-listed equities, closed at 5,433.88, up 64.31 points or 1.2%, after swinging between 5,386.59 and 5,436.98 during the session.
The day's advance was broad enough to lift the index, but it was not a clean "risk-on" story. Beneath the surface, several individual stocks moved sharply on company-specific headlines, reminding investors that headline index gains can mask divergent fortunes.
Oil spike tests REIT pricing
Oil prices jumped on Thursday after geopolitical tensions in the Gulf flared up again, stoking fears of supply disruptions. For equity markets, higher oil can be a double-edged sword: it boosts energy stocks but raises costs for many other sectors and can feed into inflation expectations.
That inflation angle is especially relevant for real estate investment trusts (REITs), which are sensitive to interest-rate expectations. REITs are often described as "long-duration" assets because their valuations depend heavily on discounting future rental income back to today. When oil prices rise, investors may start to price in stickier inflation, which can push bond yields higher. Higher yields typically translate into higher cap rates — the yield investors demand on property income — and, in turn, lower unit prices for REITs. It can also raise the cost of new debt, making acquisitions and redevelopments more expensive to finance.
Against that backdrop, two REITs made headlines on Thursday. AIMS APAC REIT dipped nearly 1% after agreeing to buy a freehold general industrial building in Western Australia for AU$42.7 million. Meanwhile, UI Boustead REIT slid nearly 1% after awarding a SG$2.6 million design-and-build contract to convert its AUMOVIO Building Phase 3 into a multi-tenanted site. Both moves will likely be judged not just on the properties themselves, but on whether the expected returns still clear a higher financing bar in a rising-rate environment.
For context, similar dynamics have played out across regional markets recently. In Australia, the ASX 200 extended its losing streak as miners and banks dragged, while energy stocks rallied on the oil surge. New Zealand stocks edged higher near record highs despite Gulf tensions and rate hike bets. The oil spike also rattled bond markets globally, as seen in the FTSE 100 futures edging higher amid renewed US-Iran tensions.
Construction firm warns of loss
On the downside, construction firm Hock Lian Seng fell more than 4% after saying it expects an operating loss in the first half of the year. That compares with a pre-tax profit of SG$10 million in the same period a year earlier. The warning highlights the uneven recovery in Singapore's construction sector, where some players are still grappling with cost pressures and project delays.
Elsewhere in the region, Asian markets showed mixed signals. Korea's KOSPI jumped 2.5% as Samsung and SK Hynix led a tech rally, while China stocks rallied after the PBoC pledged loose policy despite mixed inflation signals. European tech stocks also rebounded as chip names rallied, with the STOXX 600 edging up 0.4%.
What it means for investors
For everyday investors, Thursday's session in Singapore is a reminder that a rising index does not mean every stock is moving higher. The STI's 1.2% gain was respectable, but the day's action was shaped by a mix of macro forces — oil, inflation, interest rates — and company-specific news.
REIT investors, in particular, should keep an eye on oil prices and bond yields. If the Gulf tensions persist and oil stays elevated, the pressure on REIT valuations could intensify, especially for trusts with floating-rate debt or those planning new acquisitions. On the other hand, a de-escalation could ease those headwinds quickly.
For now, the market is watching to see whether the oil spike is a temporary blip or the start of a sustained move higher. Either way, the interplay between geopolitics, inflation expectations, and asset prices is likely to remain a key theme for Singapore stocks in the weeks ahead.
