Banks continued to power the STI to new high, but gains not broad-based

Date: June 8, 2026

• Gains of 1.5-2.3% by the banks pushed the STI up 0.2% for the week
• On Wed, the STI closed at a new high of 5,138.24
• Gains were not broad-based – losers outnumbered gains every day
• US stocks came under pressure on AI-related selling
• Strong US jobs report sent bond yields up, chance of a rate hike rising
• STI’s total return for Jan-May was 10.8%: SGX Research
• Singapore Share Buybacks Near S$1.3B in First Five Months of 2026: SGX Research
• Semiconductor Test, Equipment and AI Demand Driving Flows and Re‑rating of Tech Sector: SGX Research
• World Cup could present a buying opportunity: DBS

 

STI rose 0.2% to 5,067.53, driven by 1.5-2.3% gains by the banks

Thanks mainly to large gains in the three banks the Straits Times Index managed to rise to a new all-time closing high of 5,138.24 on 3 June but it eventually succumbed to pressure, closing the week at 5,067.53 for a net gain of 12 points or 0.2%.

The gains however, were not broad-based. On Wednesday for example, when the index set its new record, there were 345 falls versus 259 rises in the broad market. In fact, losers outnumbered gainers every day of the week.

DBS added S$0.94 or 1.5% over the week to S$63.78. UOB gained S$0.75 or 2% at S$38.55 whilst OCBC rose S$0.54 or 2.3% to S$23.94.

US stocks came under pressure on AI-related selling

On Friday the Nasdaq Composite had its worst day in more than a year after early AI stock selling snowballed in the face of higher bond yields and spending worries.

The tech-heavy index sank 4.2%, its worst daily decline since April 10, 2025, according to Dow Jones Market Data. The index also marked its worst week since April—mostly driven by Friday’s selloff.

Meanwhile the S&P 500 fell 2.6%. The index snapped a streak of nine weeks in which it closed higher whilst the Dow fell 695 points, or 1.4%.

Bitcoin extended its recent slide, falling below the US$60,000 level on Friday for the first time since September 2024 as risk-off sentiment intensified across global markets and fuelled broad selling pressure in digital assets.

For the week, the tech-heavy Nasdaq Composite fell 4.68%, and the benchmark S&P 500 lost 2.59%, while the blue-chip Dow Jones Industrial Average lost 0.32%.

Strong US jobs report sent bond yields up, chance of a rate hike rising

The US economy added 172,000 jobs in May, according to the Labor Department, more than double analyst expectations, while the unemployment rate held firm at 4.3 per cent.

The robust report was double-edged: it provided reassurance of US economic health, but all but killed any hopes of an interest rate cut from the Fed in the near future.

Although the futures market believes the US Fed will keep interest rates unchanged at its 17 June meeting, it is currently pricing in a 34% likelihood of a rate hike at the conclusion of the Fed’s September meeting, according to CME’s FedWatch tool.

The yield on the 2-year Treasury note hit its highest levels since Feb. 24, 2024, according to Dow Jones Market Data, at 4.16%.

STI’s total return for Jan-May was 10.8%: SGX Research

In a 2 June Market Update, SGX Research reported that the STI finished May with a 3.3% total return bringing its 5-months total return to 10.8%.

“SATs led the STI constituents in May with a 16.7% price gain, while reporting record FY26 revenue with net profit up 17.0% from FY25. SATS also highlighted its ability to capture cargo rerouting across alternative lanes and regions amid tariff escalations and the Middle East conflict’’ said SGX Research.

“Moves in May brought the STI total return of the past five months to 10.8% and 108.8% since the end of 2019. The two STI ETFs by State Street and Amova  recorded S$129 million of net inflows in May, bringing 2026 YTD inflows to S$687 million’’.

“This marked the 15th consecutive month of inflows, with cumulative inflows reaching S$1.2 billion since March 2025, while combined AUM stands at S$4.7 billion. For investors using digital platforms, since the end of 2019, the indicative Compound Annual Growth Rate for monthly STI ETF dollar cost was 9.2% as of the end of May’’. 

Singapore Share Buybacks Near S$1.3B in First Five Months of 2026: SGX Research

In a 2 June Market Update, SGX Research reported that over the first five months of 2026 (5M26) 57 primary‑listed stocks in Singapore bought back S$1.26B of their shares on the open market, up from about S$930M in 5M25 and S$505M over the same period in 2024.

“STI stocks led the primary stock consideration tally, jointly repurchasing a combined consideration of S$1.20B in 5M26. Non-STI stocks that led the consideration tally included Hong Fok, The Hour Glass, Food Empire, Chuan Hup, CSE Global and Hong Lai Huat’’ said SGX Research.

Secondary stocks were also active on buybacks over the past 5 months. Jardine Matheson repurchased more than 2.9 million shares for US$217 million at an average price of US$74.93 per share.

“This aligns with management’s broader capital allocation framework, where buybacks form part of value creation alongside accelerated capital recycling and a strengthened net cash position. Hongkong Land also repurchased more than 12 million shares for US$98 million at an average price of US$8.05 per share’’.

Semiconductor Test, Equipment and AI Demand Driving Flows and Re‑rating of Tech Sector: SGX Research

In a 4 June Market Update, SGX Research said that within Singapore’s technology sector in 2026, net institutional inflow and valuation expansion have been highly concentrated in semiconductor test, equipment, and production-support exposures, reinforcing these segments as the primary drivers of sector re-rating.

“Across the dozen semiconductor-linked names, valuation expansion has been led by AEM, UMS and Frencken, with P/E moving sharply higher across the dozen and the average and median now around 50x and 32x, highlighting broad-based re‑rating beyond the top three’’ reported SGX Research.

In the AI hardware segment, InnoTek has re‑rated sharply to around 83x on a current basis, with forward P/E of about 22x for FY26 indicating expectations that earnings will scale as AI‑driven capacity and customer traction translate into revenue growth.

World Cup could present a buying opportunity: DBS

The upcoming Fifa World Cup could give investors a “tactical opportunity” to pick up Singapore stocks at attractive levels, said DBS analysts.

The brokerage said the global football tournament has historically coincided with weaker trading activity on the Singapore Exchange (SGX), creating opportunities to accumulate shares ahead of a rebound in market participation.

DBS named OCBC, Singtel and Venture among its top picks for investors looking to position ahead of a potential post-World Cup rebound in Singapore equities.

“We foresee a quiet June due to the Fifa World Cup distraction, start of the US summer holiday, and the school holiday season in Singapore,” the analysts said in a report on Jun 3.

The lull presents a “good opportunity” for investors to gradually build positions ahead of a rebound in market activity following the tournament. The recovery will be supported by a pickup in post-World Cup trading participation, seasonal factors and the possible easing of Middle East tensions, they added.

DBS noted that trading activity on the Singapore Exchange (SGX) weakened during every of the five World Cup cycles observed by the brokerage between 2002 and 2018. The value of shares traded fell by between 5 and 48% during those tournaments.

Despite expectations of softer trading activity in June, the brokerage maintained a bullish outlook on Singapore equities.

The brokerage maintained its year-end target of 5,250 for the STI, while keeping its base-case scenario that the benchmark will remain above 4,700 despite expected near-term volatility.