OCBC Investment Research
24 June 2025

Global Markets Rally as Geopolitical Tensions Ease: Investment Opportunities and Stock Analysis for June 2025

OCBC Investment Research’s latest report provides a comprehensive overview of global market movements, the impact of geopolitical developments, central bank policies, and targeted investment opportunities across major regions and sectors. This detailed analysis covers market reactions, sector trends, and a full breakdown of Singapore’s leading stocks, alongside actionable insights for investors seeking resilient and growth-oriented portfolios.

Market Overview: Geopolitical Ceasefire Boosts Global Sentiment

Global markets witnessed a surge in optimism following the announcement of a ceasefire between Israel and Iran, as confirmed by President Donald Trump. US stock futures rallied, with investors taking comfort in the containment of Middle East tensions. The interception of Iran’s symbolic missile attacks on US bases in Qatar and the continued flow of oil through the Strait of Hormuz led to a drop in oil prices below US\$70 per barrel, easing inflation concerns and triggering a decline in bond yields.

• Dow Jones Industrial Average: +374.96 points (+0.89%)
• Tesla Inc: Soared 8.2% after debuting its driverless taxi service
• S&P 500: +0.96%
• Nasdaq Composite: +0.94%

US markets, with the exception of energy and healthcare stocks, closed higher on hopes that the worst of the Middle East conflict is over. Market attention is now focused on the Federal Reserve, particularly regarding the timing of potential interest rate cuts amidst ongoing calls from President Trump.

Federal Reserve Policy: Rate Cut Discussions Intensify

At its latest meeting, the Federal Open Market Committee (FOMC) left interest rates unchanged (4.25-4.50%), signaling little urgency to cut in the near term. However, Federal Reserve Vice Chair for Supervision Michelle Bowman has indicated support for lowering rates as soon as July, contingent on subdued inflation. Fed Governor Christopher Waller and Chicago Fed President Austan Goolsbee echoed similar sentiments, with the latter highlighting that future rate moves hinge on inflationary pressures from tariffs.

US Fiscal Policy: Critical Tax and Spending Votes Ahead

Trump’s ambitious tax-and-spending agenda approaches a decisive Senate vote. The package includes tax cuts partially offset by reductions in safety-net programs, expected to impact millions of Americans and add trillions to US national debt. The proposal currently lacks full support in the GOP-controlled Senate, underscoring political risks that may affect future market sentiment.

European Markets: Defensive Strategy Amid Geopolitical Uncertainty

European equities dipped 0.3% as investors weighed Iran’s potential response to US air strikes. Chemicals and banking stocks lagged, while utilities and technology shares provided some resilience. The region’s market volatility underscores the need for selective stock picking in the current environment.

Asia Pacific: Oil Price Relief and Sector Winners

Asian markets are set for a positive open after WTI crude dropped below US\$66 per barrel. Despite this, Asian equities fell to a three-week low yesterday, led by technology names. The MSCI Asia Pacific Index declined by as much as 1.3%. Defense and shipping stocks in China stood out, gaining on expectations of increased government security spending and higher tanker freight rates.

Singapore Market Snapshot

• Volume: 1,161.6 million (-10.5%)
• Turnover: 1,273 million (-41.2%)
• 52-week range: 3,198.4 – 4,005.2
• Gainers/Losers: 231 / 266

Global Index Performance and Commodities

Research Ideas: European Real Estate Opportunities via S-REITs

Singapore-based investors can access European real estate through S-REITs (Singapore Real Estate Investment Trusts) listed locally. OCBC notes that within Europe, hospitality assets have performed strongly, while retail and logistics/industrial (L&I) sectors are driven by asset quality. Office assets remain subdued.

Key points:

• Several S-REITs provide European exposure (3%–31% of portfolio AUM).
• Stoneweg Europe Stapled Trust (SERT) is the only pure-play European S-REIT.
• Top picks include:
  • CapitaLand Ascendas REIT (CLAR) – SGD3.21 fair value
  • CapitaLand Integrated Commercial Trust (CICT) – SGD2.35 fair value
  • Keppel DC REIT (KDCREIT) – SGD2.35 fair value
  • Parkway Life REIT (PLIFE) – SGD4.65 fair value
• Preference for S-REITs with DPU growth, strong sponsors, robust finances, and healthy weighted average lease to expiry (WALE) terms.

Latest Company Research and Sector Highlights

OCBC’s most recent reports cover a diverse range of companies, providing up-to-date analysis and actionable recommendations across markets:

Singapore’s Largest Stocks: Detailed Analysis and Recommendations

Conclusion: Navigating Opportunities Amid Market Volatility

The global markets have responded positively to geopolitical de-escalation, with equities rallying and commodity prices stabilizing. For investors, OCBC Investment Research highlights the importance of careful sector selection, particularly within S-REITs for European exposure, and recommends a focus on quality, growth prospects, and financial resilience. The detailed stock analysis and current market insights provide a robust foundation for formulating medium-term investment strategies in a dynamic environment.