Singapore Stock Market Resilience Amid US-Iran Tensions

Singapore Stock Market Exhibits Resilience Amid Global Uncertainty

The Singapore stock market is defying global headwinds, with the Straits Times Index (STI) near its all-time high levels. Despite the ongoing US-Iran war, which has kept Asian and major global markets under pressure, the STI has remained flat since February 28. In contrast, the Indian stock market benchmark Nifty 50 has fallen by over 6% and the S&P 500 has declined by 1% during the same period.

The Singapore dollar has also outperformed several Southeast Asian peers, offering a safe-haven appeal to investors. The resilience of the Singaporean stock market can be attributed to the country's healthy economic growth. Last year, Singapore's economy expanded by 4.8%, surpassing estimates. Another key factor is a S$5 billion equity market development programme, announced in February 2025. The programme aims to strengthen the local asset management and research ecosystem and increase investor interest in Singapore's stock market.

Singapore's GDP growth remains robust at 5%, marking a clear improvement from the earlier range of 3-4%. This acceleration reflects strengthening economic momentum and improved underlying demand conditions. The composition of the Straits Times Index is dominated by high dividend-paying companies, such as DBS Group Holdings and Oversea-Chinese Banking Corporation, which together account for more than 40% of the index. This adds to the appeal of the Singapore market.

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The road ahead for the Singapore market will depend on the country's growth-inflation dynamics, valuations, and the US President's tariff trajectory. Due to the high base, geopolitical uncertainties, and Trump tariffs, growth may ease to about 2% in 2026. The ongoing AI boom is a key driver of this uptick, with sectors such as manufacturing, logistics, and electronics witnessing increased activity, supported by rising investments and technological adoption.