Volatility Spillover Effects of Singapore’s Stock Market on Major Global Stock Markets

Against the background of Singapore evolving into a capital hub connecting the globe and ASEAN, this paper explores the risk spillover effects and dynamic evolution of Singapore’s stock market with major global stock markets, and clarifies the driving role of domestic financial policy shocks. Based on the daily return data of representative stock market indices of 12 countries from 2016 to 2026, the Generalized Spillover Index Model proposed by Diebold & Yilmaz (2012) is adopted to conduct static and dynamic spillover network analysis, and the regional heterogeneity of spillover effects and the mechanism of policy-driven spillover are further examined. The results show that Singapore’s stock market has a net spillover value of 4.81 in the global market system, acting as a net spillover provider with obvious geographical heterogeneity. Dynamically, the spillover effect of Singapore’s stock market surges in global risk events and moderates in stable periods, with its net spillover remaining positive for most of the time and only turning negative briefly during the COVID-19 pandemic, and recovering to a stable positive level after 2023 under the background of strengthened financial supervision. This paper concludes that Singapore has developed into a net spillover-type capital hub driving regional capital flows, and puts forward policy suggestions such as strengthening regional collaborative supervision, optimizing risk buffer mechanisms, balancing financial openness and stability, and improving spillover structure by policy guidance, so as to consolidate its regional financial center position and enhance the risk resistance capacity of its stock market.