Singapore shares opened on a positive note on Wednesday, driven by less-than-expected US inflation, leading to reduced expectations of the Federal Reserve raising interest rates.

The Straits Times Index opened up 0.3%, or by 17.61 points, at 5513.22.

The sentiment was led by gains recorded on Wall Street overnight on the back of softer June inflation and growing interest in AI tech shares. The inflation data could give the Federal Reserve more room to keep the interest rates unchanged.

Investors, however, will be cautiously eyeing the geopolitical developments, especially in the Middle East.