Singapore stocks raced to an all-time high on Tuesday after the city-state hiked its annual growth forecast on an AI-powered boost, while the Indonesian rupiah and the Philippine peso led regional currencies lower on elevated oil prices.
The FTSE Straits Times Index rose as much as 1.3% to a record high of 5,774.21 before paring some gains to trade 0.6% higher, heading for a third straight session of gains.
Singapore raised its 2026 growth forecast to 4.5%-5.5% from 2.0%-4.0% on a stronger-than-expected global investment in AI and a smaller drag from geopolitical tensions in the Middle East.
The revision comes alongside a GDP expansion of 5.9% in the second quarter, higher than advance estimates.
The data is another vindication of Singapore's safe-haven status and ability to navigate the current web of macro uncertainties, said DBS Group Research analyst Yeo Kee Yan, adding that the biggest transmission mechanism for the benchmark remains the banks.
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, he added.
"Stronger domestic and regional activity supports loan growth, transaction volumes and wealth-management fees, helping to offset pressure on net interest margins. The GDP upgrade is seen as providing another fundamental support for banks," Yeo said.
Top lenders DBS and OCBC climbed as much as 2.2% and 4.2%, respectively, to record highs. Singapore's dollar was little changed on the day, but remained among the region's best-performing currencies this year, gaining about 0.4% against the U.S. dollar.
Elsewhere, most Southeast Asian currencies weakened as oil prices hovered near one-week highs after fading hopes of a U.S.-Iran agreement stoked concerns over energy costs for the region's net importers.
The Philippine peso dropped as much as 0.9% to 61.243 a dollar, the Thai baht weakened 0.5%, and the Malaysian ringgit slipped 0.1%.
The Indonesian rupiah lost as much as 0.6% to 17,850 per dollar, nearly wiping out the gains secured in the previous session after insider Destry Damayanti was nominated as the sole candidate for central bank chief, easing some concerns over Bank Indonesia's independence.
MSCI will release its August index review on Wednesday, with no changes expected for Indonesia after the provider extended its market status review until November.
Jakarta stocks slipped 1.5% to a one-week low. Tech-heavy benchmarks gained on the day, with bellwether South Korea's KOSPI adding 0.7% and Taiwan closing 0.4% higher.
HIGHLIGHTS:
** Malaysia renews 10-year energy plan, targeting savings of around $21.5 billion
** BOJ's rate-hike path runs into Takaichi's bond market problems
** China central bank reverse repo volume at zero for first time since June
** Indonesia's June retail sales fall to 3% y/y, c.bank survey shows
** Taiwan, South Korea drive Asian equity outflows in July as AI worries bite - Reuters
