Banks keep STI in positive territory

Last week's market correction threw traders worldwide into a tizzy, but the local bourse still edged upwards at the close yesterday, fuelled by optimism over banking stocks.

The benchmark Straits Times Index (STI) finished higher by 7.74 points, or 0.23 per cent, to 3,384.98. An afternoon sell-off had pushed the index down from its intra-day peak of 3,399.76 just before 2.30pm.

All the same, losers beat gainers 266 to 208, or about five down for every four up. Close to 2.47 billion shares changed hands, for a value of $1.62 billion in all.

The index was lifted by all three local banks. DBS last week bumped up its dividends in a new payout policy, after clocking record fourth-quarter earnings.

While staff at the lender were handed gold cuff links and necklaces, investors perhaps saw a golden ticket instead. The counter finished up yesterday by $0.60, or 2.25 per cent, to $27.31.

Meanwhile, both OCBC Bank and United Overseas Bank will report their results before the market opens tomorrow, and shareholders may be warming up to the idea of a rosy Valentine's Day.

OCBC added $0.07, or 0.57 per cent, to $12.26, and UOB was up by $0.11, or 0.42 per cent, to $26.35.

But Singtel could not shake off the pall cast by a drop in its third-quarter net profit, announced last week. The telco shed $0.02, or 0.59 per cent, to $3.36, on a volume of 27.67 million shares.

Another beleaguered index constituent was Singapore Exchange (SGX), which was down by $0.58, or 7.35 per cent, to $7.31, with 19.48 million shares changing hands.

The bourse operator has taken a hit from the news that India's national stock exchanges are looking to end the trading of offshore derivatives tied to benchmark Indian indices such as the popular SGX Nifty 50 Index Futures.

Ms Carmen Lee, head of research at OCBC Investment Research, noted that the Nifty news would likely result in a knee-jerk reaction on the market.

"We expect some downgrades ahead following this news, which will dampen the share price for the near term," she wrote, sticking to a "hold" call on the stock.

Off the index, QT Vascular topped the actives list for stocks. About 129.39 million shares were traded for the day, with the price higher by 0.2 Singapore cent, or 11.11 per cent, to $0.02.

Casino operator Genting Singapore saw a turnover of 51.79 million shares, as the counter rose by $0.01, or 0.83 per cent, to $1.22.

Brokers have been mentioning the stock as a bargain buy if share prices slide during another bout of market correction.

Singapore Post slid by $0.02, or 1.4 per cent, to $1.41, on a volume of 23.28 million shares. After the market shut for the weekend, it responded to SGX queries over some line items for liabilities in its third-quarter results.

Sembcorp Marine had the dubious honour of being slapped with its second SGX query in a month over trading activity. The counter slipped by $0.32, or 11.9 per cent, to $2.37. Its share-price spike of $0.18 on Jan 23 had prompted the first query.

Asian equities made broad gains yesterday, with Shanghai up by 0.78 per cent and Seoul by 0.91 per cent, thanks to what stock watchers pegged as bargain-hunting. The Hang Seng, though, saw no reprieve, sliding by 0.16 per cent.

Phillip Capital analysts wrote in their monthly market outlook for the STI: "The current sell-off that the market is experiencing is way overdue, considering how far and fast the market has been rising for the past year without seeing any form of sharp correction."

They called the current sentiment "bearish", but added that when it comes to the Singapore index, "the long-term uptrend remains intact".

The team noted: "Currently, the key level worth watching is the 3,354 to 3,341 support area and 200-day moving average. That will be the pivotal point for propping the long-term uptrend higher."

For full listings of SGX prices, go to http://btd.sg/BTmkts