Monthly Market Wrap: Middle East conflict, rising oil capped stock market gains – STI fell 2.2% in March, up 5.1% in 1Q

Date: April 1, 2026

• The STI fell 2.2% in March but still managed a 5.1% rise for 1Q
• Middle East war, rising oil led to heightened volatility – STI underwent 100-points moves per day four times
• Oil spiked to above US$100 a barrel
• Wall St ended the month on a high on hopes war will end soon
• As expected, the US Federal Reserve held rates steady, cited war uncertainty ahead – stocks plunged in response
• Powell Says Fed Can Afford to Wait on Oil Shock
• Institutions Pull Back as Buybacks & Insider Buying Persists: SGX Research
• DBS, Genting Singapore and CapitaLand lead retail buys on SGX in March: SGX Research
• CLAR bulks up with S$1.4 billion Singapore, Japan buys funded by S$900 million unit issue
• UI Boustead REIT launched IPO at S$0.88 per unit, closed lower at debut

 

The STI fell 2.2% in March, up 5.1% in 1Q

The US and Israel attacked Iran on 28 Feb, so the month of March was entirely dominated by developments in the Middle East, particularly the impact on oil prices and supply chains.

Wall Street was mainly weak throughout the month, with the major indices moving inversely to oil prices. Here, the Straits Times Index traded within a narrow band, hovering between 4,800 and 5,000 for most of the month before eventually finishing at 4,885.45 for a net loss of about 110 points or 2.2%.

However large gains in January and February ensured that the index still managed to register a gain of about 239 points or 5.1% for the first quarter.

Volatility increased sharply – the STI moved more than 100 points on 4 trading days

The index suffered 100-odd points losses on the 2^nd, 4^th and 23^rd, and recorded a 100-odd points gain on the 10^th. Average daily volume was above S$2b.

Oil spiked to above US$100 a barrel

In the first week oil rose more than 36% while oil and gas producers, refiners, and energy infrastructure companies also surged. West Texas Intermediate (WTI) Crude reached a high of US$92.61 per barrel, while Brent jumped to exceed US$94.55.

In the second week WTI rose to US$98.71 a barrel while Brent crude was up to US$103.14 and by the third week, prices were even higher, with Brent crude at US$112 per barrel.

The war has cut off access to about 20% of the world’s crude oil and another 20% of the liquefied natural gas, or LNG, that normally traverses the Strait of Hormuz that connects the Persian Gulf with the rest of the world. Oil prices are up about 50% since the war began.

The market is starting to price in oil staying higher for longer. Three-month Brent crude futures rose 2% to US$100.79 a barrel. That would be the highest close since the war began—and only the second close above US $100 during the conflict.

“So it’s becoming clear that markets are expecting an extended period of high oil prices, with stagflationary implications for the global economy,” Deutsche Bank strategist Henry Allen said.

Wall St ended the month on a high on hopes war will end soon

On Tuesday 31^st March the US stock market marked its best day since May as the first quarter of 2026 wrapped up with renewed hope an end to the Iran war could come sooner rather than later.

The Dow Jones Industrial Average rose 1,125 points, or 2.5%. The S&P 500 rallied 2.9%. The Nasdaq Composite surged 3.8%. All three marked their best days since May 12, 2025.

The yield on the 2-year Treasury note fell to 3.8%. The 10-year yield was down to 4.31%.

The market spiked suddenly after reports about Iran’s president. Bloomberg, citing a report from IRNA, wrote that Iran’s President Masoud Pezeshkian told European Council President António Costa that Iran has “the necessary will to end this war.”

The report added Iran expects “the essential guarantees to prevent the recurrence of aggression” among other requirements.

As expected, the US Federal Reserve held rates steady, cited war uncertainty ahead – stocks plunged in response

On 18 March after the FOMC kept interest rates unchanged at 3.5-3.75%, the Dow Jones Industrial Average fell 769 points, or 1.6%. The S&P 500 dropped 1.4%. The Nasdaq Composite was down 1.5%.

All three marked their worst FOMC decision day since Dec. 18, 2024, according to Dow Jones Market Data. The Dow fell to its lowest level since November.

Though the market had anticipated rates being kept steady, the major indexes fell as Fed Chair Jerome Powell discussed uncertainty surrounding the central bank’s median forecast of one interest rate cut for 2026.

“For this one, though, I think even more than usual, it’s good to take the forecasts with a grain of salt because it’s subject to just very high levels of uncertainty,” Powell said.

Powell Says Fed Can Afford to Wait on Oil Shock

Federal Reserve Chair Jerome Powell on Monday this week said the central bank is inclined to look past rising oil prices, offering his clearest guidance yet on how the Fed plans to navigate the economic fallout from the Iran conflict.

Investors had come into the session anxious about whether surging oil prices would force the Fed’s hand. Powell’s answer, delivered to a room of Harvard undergraduates, was essentially no, at least for now.

“Energy shocks have tended to come and go pretty quickly,” he said. “By the time the effects of tightening take effect, the oil price shock is probably long gone’’.

He said Fed policy was in a good place to wait and see how the situation develops. The Fed’s tools, he noted, work on demand, not supply, making them a blunt instrument against an energy shock.

Powell spoke at a moderated discussion with Harvard’s introductory economics class at Sanders Theatre on Monday afternoon, fielding questions from Harvard economist David Laibson and students in the audience.

On the question of Fed independence, Powell was also direct. Monetary policy, he said, needs to be fully insulated from political pressure. The Fed’s job is to serve the American public, not any administration.

The test of whether a Fed chair has done that job right, he said, is whether they could be reappointed by either party. He noted that both he and Ben Bernanke had been reappointed.

Institutions Pull Back as Buybacks & Insider Buying Persists: SGX Research

In a 30 March Market Update, SGX Research said for the five trading sessions spanning March 20 to March 26, institutions were net sellers of Singapore stocks, with net institutional outflow of S$79 million, partially reversing the S$365 million net inflow for the preceding 5 sessions.

“Stocks that saw the highest net institutional outflow over the five sessions included CapitaLand Ascendas REIT, ST Engineering, Hongkong Land Holdings, DBS Group Holdings, Keppel, Oversea‑Chinese Banking Corporation, Seatrium, CapitaLand Investment, Yangzijiang Shipbuilding Holdings and City Developments’’ said SGX Research.

“Meanwhile, Sembcorp Industries, Haw Par Corporation, Singapore Telecommunications, UOB Kay Hian Holdings, AEM Holdings, Centurion Accommodation REIT, ComfortDelGro Corporation, Singapore Airlines, Suntec REIT and Singapore Exchange led the net institutional inflow’’.

SGX Research also noted that over the five sessions, close to 100 director interests and substantial shareholdings were filed for more than 50 primary-listed stocks and that directors or CEOs reported 24 acquisitions and no disposal, while substantial shareholders recorded six acquisitions and seven disposals.

“This included CEO or director acquisitions filed for Asian Pay Television Trust, CapitaLand China Trust, Centurion Corporation, Darco Water Technologies, Hyphens Pharma International, IFS Capital, ISOTeam, Multi‑Chem, Nera Telecommunications, NetLink NBN Trust, Raffles Medical Group, Sunmoon Food Company, Tai Sin Electric, Wing Tai Holdings and XMH Holdings’’.

DBS, Genting Singapore and CapitaLand lead retail buys on SGX in March: SGX Research

Retail investors bought a net S$638 million in Singapore stocks in March.

Counters in the financial services, real estate investment trusts (Reits) and consumer cyclicals sectors drove net buys, said the Singapore Exchange (SGX) in a 25 March Market Update.

Local bank DBS, casino operator Genting Singapore and real estate firm CapitaLand Ascendas Reit were among the top stock purchases by retail investors in the 17 trading sessions up to Mar 24.

Stocks from the industrials and technology sectors such as Yangzijiang Shipbuilding and CSE Global, respectively, were also among the top 15 stocks favoured by retail investors.

The total value of local stock buys in March raised Q1 FY2026’s total retail net buying in local stocks to S$675 million.

The surge in retail demand follows a strong 2025, when retail investors accumulated S$2.6 billion of net buys in local stocks, said SGX.

CLAR bulks up with S$1.4 billion Singapore, Japan buys funded by S$900 million unit issue

CapitaLand Ascendas REIT (CLAR) raised S$903.5 million in gross proceeds during the month comprising approximately S$600.0 million from an oversubscribed private placement and S$303.5 million from a preferential offering.

The money will be used to help buy S$1.4b in properties here and in Japan.

In Singapore, it is set to buy all of 25 Loyang Crescent – a cluster of ramp-up logistics and industrial buildings – for S$504.2 million. It has also bought a 50 per cent interest in Ascent, a premium business space property, for S$245 million. A global sovereign wealth fund will acquire the remainder of Ascent.

CLAR is also entering Japan through the acquisition of a 49% in a Tier 3 hyperscale data centre in Greater Osaka for S$620.7 million. The remaining interest in the data centre is held by a fund managed by Mitsui & Co Realty Management.

UI Boustead REIT launched IPO at S$0.88 per unit, closed lower at debut

UI Boustead Real Estate Investment Trust (REIT) launched its initial public offering (IPO) of about 677.2 million units at S$0.88 each, and started trading on the Singapore Exchange mainboard on Mar 12.

Its unit commenced trading at S$0.805, about 8.5%  below the initial public offering (IPO) price of S$0.88. The counter rose to S$0.835, and ended the day at its opening price, with nearly 103 million shares transacted.

It finished the week at S$0.825 and the month at S$0.805.