A mixed session despite STI's jump
Initial reaction to Trump's speech is lukewarm as market players prefer to wait for Wall Street's direction
After having fallen 41 points in the previous three sessions, the Straits Times Index (STI) yesterday bounced 26.16 points up to hit 3,122.77, thanks to big gains in the Jardine stable and Keppel Corp.
Volume, which had spiked up on Tuesday to $2.7 billion because of month-ending portfolio rebalancing, yesterday fell back to 2.25 billion units worth $1.5 billion - still decent when compared to last year's $1 billion average.
Excluding warrants, there were 236 rises versus 225 falls in the entire market, which suggested trading was much more mixed than the index might indicate.
Traders said most market players preferred to wait for Wall Street's reaction to US President Donald Trump's address to Congress which was broadcast at 10am Singapore time yesterday.
The initial reaction was lukewarm as Mr Trump did not offer any details on his economic or trade policies.
"Investors had little to grasp, and market reaction during the speech was choppy and directionless," market strategists Paul Christopher, Scott Wren and Sameer Samana at Wells Fargo Investment Institute were quoted as saying by Reuters.
"The speech was short on details and did not even prioritise the president's goals."
In the property sector, CapitaLand's shares ended $0.04 weaker at $3.60 with 22.2 million traded.
They closed at a 52-week high of $3.65 on Monday, having risen from $3.50 a week earlier.
RHB said interest in the stock was because of two reasons - CapitaLand's focus on asset-light strategies to enhance returns and renewed interest in developers amid a spate of privatisation talks.
"Maintain NEUTRAL, with a higher target price of $3.60 pegged at a 25 per cent discount (from 30 per cent) to a revised RNAV (revalued net asset value) of $4.80," said the broker.
Among the actives was social media firm YuuZoo Corporation, which dropped $0.006 to $0.141 with 23.1 million shares traded.
The firm on Tuesday announced it has called off a proposed investment in an American movie studio.
It also announced a $922,000 loss for the fourth quarter ended Dec 31, 2016, versus a $4.75-million profit a year earlier.
State Street Corporation said its Global Investor Confidence Index (ICI) decreased to 92.9, down 1.6 points from January's revised reading of 94.5.
The decline in sentiment was driven by the 9.3-point decrease in the European ICI to 83.3 along with the four-point decline in the Asian ICI to 104. By contrast, the North American ICI rose 3.8 points, from 90.9.
"In February, global institutional investors continued to shy away from risk despite the ongoing uptrend in risky asset prices," said ICI co-developer Kenneth Froot.
"Interestingly, we note a striking disparity in risk tolerance between North American investors and other regions.
"It remains unclear whether this disparity stems from the relative dynamism of the US economy in the developed world, or from unrealistic Trumpian optimism on earnings and growth instead."
Rabobank in its The State of the State of the Union noted that the US Federal Reserve has been delivering very hawkish signals recently.
"Further hawkish Fedspeak from (Fed governors) Williams and Bullard, including such choice phrases as giving 'serious consideration' to a March hike, have seen odds of that eventuality soar to 70 per cent - an incredible shift in just a few days," noted Rabobank.
In fact, the probability of an interest rate hike at the March 14-15 Federal Open Market Committee meeting is now 78 per cent, compared to 40 per cent at the end of last week.
This article appears in The Business Times today. For full listings of SGX prices, go to http://btd.sg/BTmkts