STI hits new two-year high

Four out of five is not bad and that is how the Singapore bourse's key Straits Times Index (STI) fared this week. It notched up gains on all but one trading day, capping the week's trading on a robust note - a fresh two-year high.

The STI jumped 30.19 points, or 0.9 per cent, to finish at 3,386.44 yesterday. The gains were partly inspired by a rally in United States stocks led by technology shares, which got a boost from upbeat earnings.

This comes ahead of key gross domestic product data out of the US that will be closely watched to gauge the resilience of the world's largest economy. Most expect the numbers to be strong based on the recent run of data out of US.

Week on week, the STI has advanced by 45 points, or 1.4 per cent. More significantly, it has sustained its upward trend to bid goodbye to the 3,350 resistance mark - for now, at least.

"It was a week characterised by continued buoyancy in economies and markets, with a flurry of positive data releases indicating a robust end to the third quarter and sustained momentum starting Q4," said DBS Group Research in its inaugural weekly wrap.

The encouraging data came out of Singapore, South Korea and Thailand with the common theme being strong exports.

"But we are also noticing signs of a broad-based recovery with domestic demand perking up," said DBS Group Research.

It was a week characterised by continued buoyancy in economies and markets, with a flurry of positive data releases indicating a robust end to the third quarter... DBS Group Research

"This should not be surprising, as for many export-oriented economies, there tends to be a strong link between exports, investment, and ultimately, consumption."

The euro came under selling pressure after the much-awaited European Central Bank (ECB) policy meeting decided to extend its stimulus.

The ECB halved the size of its bond purchasing to €30 billion (S$47.6 billion) a month from January. This was mostly expected, but the move to leave the door open to backtrack was "dovish" and unexpected.

"If (ECB chief) Mario Draghi wanted to avoid a taper tantrum, he looks to have played the market magnificently," said ING Asia-Pacific's research head of Asia Rob Carnell.

"Having floated various more hawkish versions of the scheme ahead of the meeting, we feel like the 'patsy' in a game of poker, with the ECB playing a brilliant bluff and taking the pot.

"Despite denying this was a taper (it is), Mr Draghi has managed to sell this to the market as an easing (it isn't), with the euro softening on the news and the dollar index spiking higher."

The next pick for US Federal Reserve chair continues to hog market attention with some reports that current head Janet Yellen may be out of the race.

Some 1.88 billion shares worth $1.3 billion were traded in the Singapore stock market yesterday, with 236 counters up and 202 counters down.

Gains were led by Global Logistic Properties, which rose three Singapore cents, or 0.9 per cent, to $3.32. It was actively traded with some 48 million shares worth $158 million done.

Singapore's three banking stalwarts again galvanised the market, with DBS Bank gaining 33 Singapore cents, or 1.5 per cent, to $22.68. OCBC Bank rose 23 Singapore cents, or nearly 2 per cent, to $11.80, while United Overseas Bank advanced 20 Singapore cents, or 0.8 per cent, to $25.

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