Market rallies after five-day slide

Some respite from Korean tensions and momentum from positive overnight markets in the United States helped the Singapore stock market to arrest a five-session decline on Tuesday.

The Straits Times Index (STI) climbed 0.52 per cent, or 16.8 points, to close at 3,263.79. Gainers outnumbered losers 253 to 165, or about three up for every two down.

The one caveat to the rally was that it came on thin volumes.

Only about 1.9 billion shares changed hands, which was about four-fifths the daily average of 2.4 billion shares in the first seven months of the year.

In terms of traded value, yesterday's turnover was $948.5 million, which was 79 per cent of the January-to-July daily average of $1.2 billion.

"It's nice to have a positive session after a bunch of negative sessions," one trader said.

"It would be nicer if the volumes are better, but this is our reality."

IG market strategist Pan Jingyi said the market may have experienced a technical rebound, catalysed by the US indices starting the week with a modest increase in overnight markets.

The S&P 500 gained 0.12 per cent, or 2.82 points, to close at 2,428.37 on Monday in New York.

"A lot is on the technical end of things, the market holding up and finding support. Also, we saw US markets break the downtrend on Monday," Ms Pan said.

She said investors also found reassurance in a lack of escalation in tensions in the Koreas. Despite some sabre rattling before the US and South Korea began joint military exercises this week, there was a welcome absence of fiery rhetoric yesterday, she said.

Among the index stocks, telco Singapore Telecommunications gained 0.3 per cent, or one cent, to $3.75.

Among the banks, DBS Group Holdings rose 0.2 per cent, or five cents, for a $20.54 close.

Commodity trader Wilmar International advanced 1.6 per cent, or 5 cents, to close at $3.15.

Yesterday's session was one for the smaller counters, with a few small-cap names leading the volumes table.

Water-treatment specialist Moya Holdings Asia rose 8.4 per cent, or 0.9 cents, to 11.6 cents, while film production company Spackman Entertainment Group rose 13.1 per cent, or 1.4 cents, to close at 12.1 cents.

Spackman, which said a week ago that it was embarking on an acquisition path, has steadily been climbing since then.

Its share price has risen 18.6 per cent, or 1.9 cents, over the past week.

In an Aug 16 note, RHB Research expressed optimism about the company's potential to grow its movie production capacity and to broaden its sources of revenue.

"Management said that it is reviewing future acquisition opportunities and intends to reshape its business model to diversify its revenue stream.

"It would also aggressively pursue new acquisitions that enable Spackman to have a more consistent revenue stream and be less reliant on the box office performance of its movies," RHB wrote.

The looming Jackson Hole meeting of the US Federal Reserve will continue to hover over the market for the rest of the week, keeping volumes thin ahead of key speeches by European Central Bank president Mario Draghi and Fed chairwoman Janet Yellen that will be given after the markets close in Singapore on Friday.

Amid current uncertainty about the Fed's inclination, the market will be looking closely for some guidance, Ms Pan said.

"Any clarification here will trigger quite a bit of reaction," she said.

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