Business

STI up 20.7 points as sentiment turns bullish

OCBC, UOB, Singtel and Jardine Matheson among gainers as regional markets rebound

With the Dow Jones Industrial Average tipped to rise at its opening, market sentiment turned bullish and most regional bourses rebounded into positive territory yesterday afternoon, as the greenback slid to its worst level since March.

Snapping out of the rough start to the week, the benchmark Straits Times Index (STI) ended the day 20.69 points, or 0.68 per cent, higher at 3,067.49.

Trading was firm with turnover amounting to nearly 1.9 billion units worth some $1.2 billion, comparable to the $1.1 billion daily average in December. Excluding warrants, gains were broad-based with 270 gainers to 164 losers.

Banking stocks, which have fared well after the US election, posted a mixed performance.

DBS extended its losses for a second consecutive day, ending nine cents lower at S$18.88, while OCBC and UOB swung into the green to end at S$9.48 and S$20.98, respectively.

Blue chip stock Singtel, whose Australian subsidiary Optus announced just before the Chinese New Year a A$75 million (S$80.6 million) five-year agreement with Flight Centre Travel Group, gained four cents to close at S$3.91.

In total, OCBC, UOB, Singtel and Jardine Matheson helped the index gain 11 points.

Among the most active were healthcare play QT Vascular and Healthway Medical, as well as ThaiBev, which recorded over 35 million units changing hands.

Regional markets rallied late yesterday as optimism surged, with Japan's benchmark Nikkei 225 closing higher on bargain-hunting after two days of losses and as a rise in the yen fizzled.

The tumbling greenback sent mining and oil stocks into the green in Australia, with the S&P/ASX 200 index closing up.

New Zealand's benchmark S&P/NZX 50 index ended the day flat as the gains in industrials were wiped out by losses in material stocks.

South Korea's Kospi closed higher on domestic institution buying, while Hong Kong's Hang Seng trimmed earlier losses to end the day slightly lower.

The Chinese and Malaysian markets were closed.

US earnings reports would continue to flow in through the week as investors gear up for the Federal Open Market Committee on Thursday and non-farms payroll data on Friday, CMC Markets said in its morning snapshot.

But it warned that "the data could once again be overshadowed by politics, however, as traders look for signs that (US President Donald Trump) will implement his more market-friendly policies".

Pan Jingyi, market analyst at IG Asia, pointed out that the US dollar index touched a 2.5-month low following Mr Trump's comments that China and Japan devalued their currencies. His trade chief Peter Navarro also blamed Germany for the "grossly undervalued" euro, which sent the EUR/USD pair up to 1.08 levels on Wednesday.

"The trust, previously placed in the team surrounding Trump to place checks upon his actions, is likely to have been dwindling against the backdrop of policies we have seen thus far.

"As expected, the amalgamation of US dollar weakness and fear have boosted gold prices, with prices touching a one-week high above US$1,210," said Ms Pan.

The silver lining came in the form of favourable Chinese purchasing managers' index (PMI) data, which kickstarted the Asian stock market on Wednesday morning.

"The country's manufacturing PMI reading in January was 51.3, higher than the market consensus of 51.2.

"This marks six consecutive months of expansion in the country's manufacturing sector and shows further stabilisation of Asia's largest economy," said Margaret Yang, analyst at CMC Markets Singapore.

She added that as concerns rose over potential trade tensions between Beijing and Washington under Mr Trump's administration, "a robust PMI reading will allow China's policy makers to shift towards a neutral policy stance".

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

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