AI and Geopolitical Risks Coexist: Progress in US-Iran Talks Boosts Asian Stocks

Progress in US-Iran peace talks eases market fears of a breakdown, lifting most Asian stocks. The Straits Times Index (STI) rose 0.22% or 11.31 points on Monday (June 22) to close at 5,204.01 points.

The STI opened lower and traded in a volatile range, but staged a late-session rebound to reclaim the 5,200 level.

Wang Suiqin, Senior Market Analyst at OANDA, said the STI's late recovery was mainly driven by positive news on US-Iran talks. Both sides will continue technical-level consultations and have agreed on a negotiation roadmap to reach a final deal within 60 days.

Across the region, Japan's Nikkei 225 hit another record closing high, gaining 1.55% to 72,353.96 points. Leading the rally were artificial intelligence (AI) and semiconductor-related stocks.

Nikkei reported earlier that the Japanese government plans to spur public and private investment totaling 370 trillion yen (about USD 2.29 trillion) in 17 sectors, including AI, semiconductors, and aerospace, by 2040. Expectations of increased investment in growth sectors lifted semiconductor, robotics, and AI-related tech stocks.

Stock markets in Seoul, Shanghai, Shenzhen, and Taiwan also gained, with advances ranging from 0.69% to 2.75%. Hong Kong and Sydney markets fell 0.65% and 0.18% respectively.

Glenn Yin, Research Director at ACCM, said Monday's trading showed AI remains the strongest factor against geopolitical risks and high interest rates.

Wataru Akiyama, equity strategist at Nomura, noted that AI-related companies again became the main driver of the stock market rally. However, the market remains highly alert to developments in Iran and the Middle East.

Wang Suiqin pointed out that besides the geopolitical situation, the market is also focused on the upcoming US Personal Consumption Expenditures (PCE) data due Thursday (June 25). If core PCE inflation reaches above 3.3%, the Fed's monetary policy direction may turn more hawkish, strengthening the US dollar and potentially triggering profit-taking in Singapore stocks.

On the technical front, Wang believes the STI remains above its 20-day moving average, keeping a bullish short-term outlook with resistance at 5,350 points.

Trading Overview and Individual Stock Performance

Singapore stocks saw a total trading volume of 1.26 billion shares and a total value of SGD 2.01 billion on Monday. There were 270 advancing stocks and 306 declining stocks.

Among STI component stocks, 12 rose, 3 were flat, and 15 fell.

Leading the gainers was DFI Retail Group (DFIRG), whose share price rose 3.8% to close at USD 3.82. The biggest loser was Jardine Matheson Holdings (JMH), which fell 3.95% to close at USD 62.2.

In corporate news, GLL IHT Pte. Ltd, a subsidiary of GuocoLand Limited, has priced a SGD 110 million 2.5% coupon note, with issuance expected on June 30. The note is part of the company's SGD 3 billion multi-currency medium-term note program, and proceeds will be used for GuocoLand and its subsidiaries' operating expenses. The note matures on September 30, 2030, with semi-annual interest payments on March 30 and September 30 each year, starting March 30, 2027.

GuocoLand shares fell 0.46% to close at SGD 2.18 on Monday.

FJ Benjamin, a fashion retailer, placed 42 million new shares at SGD 0.0072 each to two investors, one of whom is Yee Ming Yee, the fourth-generation scion of local traditional Chinese medicine chain Eu Yan Sang. The company stated that Yee Ming Yee subscribed for 14 million shares, totaling SGD 100,800, while another investor, Liang Xiufeng, subscribed for the remaining 28 million shares, worth SGD 201,600. After the placement, Yee Ming Yee and Liang Xiufeng hold 1.14% and 2.28% of the company respectively. FJ Benjamin shares closed at SGD 0.008, unchanged.

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