Business

Local, regional bourses climb

The feel-good effects of Wall Street gains and rising crude oil prices are being felt

The Straits Times Index (STI) finished 8.9 points, or 0.3 per cent, higher at 3,336.72 yesterday, ahead of the US Federal Reserve decision that is largely expected to remain unchanged.

A combination of upbeat factors, including overnight gains on Wall Street and rising crude oil prices, also fuelled gains in the local stock market and elsewhere in the region.

While the absence of a press conference by Fed chief Janet Yellen and any summary of economic projections could take away a "chunk of the excitement", investors would most probably scrutinise the policy statement for clues on the tightening plan, said FXTM research analyst Lukman Otunuga.

"Many questions still remain unanswered over both the timings and pace of rate hikes, which may weigh on the minds of Fed-watchers ahead of the rate decision," he said, adding that if at all, any unexpected surprises from the post-meeting policy statement may come in the form of inflation concerns.

Stubbornly low inflation this year has been a concern to Fed officials who have targeted a 2 per cent rate.

Other major Asian markets also gave a good show. Japan's Nikkei 225 rose 0.5 per cent, while Hong Kong's Hang Seng inched up 0.3 per cent. China's Shanghai Composite gained 0.1 per cent, and Australia's ASX 200 was up 0.9 per cent.

Wall Street gained overnight on the back of upbeat earnings, with the Dow Jones climbing nearly half a per cent, while the S&P 500 finished at a record high.

IG Markets' Jingyi Pan, in her morning note, said that a strong rally in crude prices, underpinned by the recent Organisation of the Petroleum Exporting Countries rhetoric and the report of a drawdown in US inventories, was also expected to add to the glow for Asian markets yesterday. She was right.

MANUFACTURING

Latest figures showed that Singapore's manufacturing engines were all fired up for the 11th straight month last month, rising 13.1 per cent versus a year ago.

Analysts expect the strong industrial output data to prompt an upward revision for gross domestic product growth in the second quarter from the 2.5 per cent projection.

On the local bourse, some 2.7 billion shares worth $1.2 billion were traded, not vastly different from Tuesday's 2.8 billion shares worth $1.2 billion.

In its latest market focus, DBS Research said it expects some "interest rotation" from leading sectors - banks, properties and technologies to industrials and capital goods including rig builders - as the economic recovery shifts from early towards mid-expansion.

On the back of this, the house is positive over Sembcorp Industries, Sembcorp Marine and Keppel. Sembcorp Industries closed unchanged at $3.34, while Sembcorp Marine closed 3.5 Singapore cents, or nearly 2 per cent lower, at $1.76. Keppel fell eight Singapore cents, or 1.2 per cent, to $6.52.

Banking stocks led the day's gains with DBS Bank rising 29 Singapore cents, or 1.3 per cent, to $21.89, followed by OCBC Bank, which finished at $11.25 after rising seven Singapore cents, or 0.6 per cent.

United Overseas Bank was up eight Singapore cents, or 0.3 per cent, at $24.28. Gains from the three banking stalwarts added nearly 10 index points to the STI.

CNMC Goldmine Holdings shed 1.5 Singapore cents, or 5 per cent, to 28 Singapore cents following an announcement that it expects to post "significantly lower profit" for the second quarter due to lower ore grades.

Kris Energy gained 0.6 Singapore cent, or 4 per cent, to 15.2 Singapore cents, and was one of the most actively traded for the day with 41 million shares worth $6.4 million done. This could have been fuelled by rising oil prices.

This article appears in The Business Times today. For full listings of SGX prices, go to btd.sg/BTmkts

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