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Banks lead Singapore higher, Malaysia slips

SINGAPORE (NewsRise) - Shares in Singapore rose Wednesday, as heavyweight lenders tracked an advance in U.S. Treasury yields ahead of a near-certain Federal Reserve rate increase. Malaysia shares edged lower following losses on Wall Street.

Singapore's FTSE Straits Times index advanced 0.5% to 3,145.29. DBS Group Holdings rose 1% to S$19.28, and United Overseas Bank added 0.7% to S$21.68 after U.S. 10-year bond yields climbed to over one-month highs Tuesday. Singapore's 10-year bond yield rose four basis points to 2.37%.

U.S. indexes fell for a second session. According to CME's FedWatch tool, markets are now pricing in an 80% probability the Federal Reserve will raise interest rates at its March 14-15 meeting.

The FTSE Bursa Malaysia KLCI slipped 0.2% to 1,725.54.

"These days it is all about the Fed and the market is almost certain that Fed will move rates next week," said Jingyi Pan, market strategist at IG. "What does not appear as certain is what could be in store for the markets after this turn of the corner. The delay in the introduction of Trump's pro-growth policies has the market torn on how many Fed hikes we may see this year and into 2018."

Global equities have risen since Donald Trump won presidential elections, with U.S. indexes soaring to record highs, as investors bet his economic policies will spur growth. While he has promised "massive" tax reforms and higher infrastructure spending, he has steered clear of providing detail.

"Investors are likely to stay cautious over the week and key indices may trend sideways for the time being ahead of the Fed meeting," said Loui Low Ley Yee, an analyst the Hong Leong Investment Bank.

Singapore Exchange on Wednesday proposed changes to the way stocks are traded and introduced new rules as it continues to look for ways to increase trading volumes on the local bourse.

Late yesterday, the bourse operator reported a 35% month-on-month jump in total securities turnover and a 7% increase in derivative volumes. The company's stock rose 1.5%.

Among the major losers were rig builders Keppel Corp and Sembcorp Marine, down 1.9% and 3.2%, as crude prices were poised for a third day of losses Wednesday after the American Petroleum Institute reported a larger-than-expected buildup in U.S. crude inventories.

Yangzijiang Shipbuilding Holdings was the top loser, slipping 4.7% to S$1.125 as it snapped a five day over 25% rally.

In Malaysia, Hap Seng Consolidated slipped 0.7% to 9.02 ringgit. Late Tuesday, the company said it entered into a conditional share deal with LSH Logistics for disposal of 100% equity interest in Hap Seng Logistics for 750 million ringgit.

Plantation major IOI Corp slipped 2.5% to 4.69 ringgit, paring yesterday's entire advance. CIMB Group Holdings, up over 8% this month, slipped 1.5% to 5.37 ringgit.

--Kevin Lim and Nimesh Vora

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