Asian Tech Stocks in Turmoil, Singapore Market Emerges as Safe Haven, Poised for Best Monthly Gain in 6 Years

Fueled by gains in bank stocks, Singapore's stock market is poised to deliver its best monthly performance in nearly six years. The Straits Times Index has already surged 8.6% in July, marking the strongest monthly gain since November 2020.

The primary driver behind this rally is the strong performance of the banking sector, which holds significant weight in the index. DBS Group Holdings Ltd. and Oversea-Chinese Banking Corporation (OCBC) have been standout performers, both recording double-digit percentage gains this month. These two banking giants have become the main engines propelling the index higher.

While global markets remain volatile due to sharp fluctuations in the artificial intelligence (AI) sector, Singapore's market—anchored in traditional industries like banking—has emerged as a defensive safe haven for investors. Market traders widely praise Singapore's economic and political stability, and the index's inclusion of high-dividend-yielding stocks offers an additional margin of safety amid uncertain global conditions.

Yeo Sui Chuan, a portfolio manager at Fidelity International, noted that the Singapore market strikes a strong balance between "growth" and "valuation." He emphasized that domestic banks not only offer stable and attractive dividend yields but also indirectly benefit from regional wealth inflows and growing export trade.

Meanwhile, hopes for a diplomatic resolution to the Middle East conflict surged after U.S. President Trump and Israeli Prime Minister Netanyahu met at the White House, prompting global oil prices to retreat on Tuesday. Lower oil prices are expected to ease pressure on the U.S. Federal Reserve (Fed) ahead of its interest rate decision later this week.

Amid the broader sell-off in Asian tech stocks, the Straits Times Index held steady on Wednesday, July 29, edging up approximately 0.7% during trading hours.