Can STI Continue Defiant Climb in Second Half of 2025?

Market reforms among factors fuelling bullish sentiment even as risks remain

- Angela Tan

Singapore's stock market enters the second half of 2025 on the back of a surprisingly robust first-half performance, defying earlier jitters over global trade and geopolitical tensions.

The Straits Times Index (STI) crossed the 4,000 threshold for the first time in March, and surged past 4,200 in July.

It is up more than 10 per cent since the start of 2025 and up more than 20 per cent in the past 12 months, underpinned by strong corporate earnings, dividends and the Government's ambitious plans to revitalise the stock market.

Investors have shrugged off the 10 per cent tariff on most goods entering the United States starting on April 5, dismissing the tariff escalations, de-escalations and delays as negotiation tactics. The final tariff hikes will not be as dire as the first threat, they reckon.

But tactic or not, the average weighted tariff slapped on goods entering the US today is 16 per cent compared with 2.5 per cent in 2024, according to UBS calculations. If all of the postponed tariffs were to be reimplemented, the rate would rise to 21 per cent.

Asean is likely to receive higher-than-average tariffs to discourage transshipment from China, the JP Morgan economics team said.

Sectoral tariffs on semiconductors and electronics will be particularly important, as they account for a majority of total Asean exports.

The new Aug 1 deadline will be pivotal for global trade and equity markets. There is a possibility that markets could tank like they did in April if there is no progress.

Rising tariff levels would also see growth forecasts in the US fall further, and increase odds of a recession in the world's No. 1 economy.