Business

STI logs in a 52-week high

Trump creates favourable reasons for Asian bulls to charge on, says expert

The colour green swooshed across all major Asian stock markets yesterday, buoyed by a culmination of factors including rosy economic data, with Singapore's benchmark index resolutely logging another 52-week high, continuing its upbeat ascent of the previous week.

The Straits Times Index (STI) rose 11.24 points or 0.4 per cent to 3,111.63 on commendable turnover of 3.3 billion shares worth $1.3 billion.

Other regional markets did not fare too shabbily, with Japan's Nikkei 225 up 0.4 per cent.

The country released data that showed its economy grew at an annualised pace of 1 per cent in the final quarter of last year, which was broadly in line with analysts' expectations of a 1.1 per cent uptick.

Hong Kong's Hang Seng and China's Shanghai Composite gained 0.6 per cent.

"It was another action-packed weekend that set a positive start to the week for Asian markets. The recent first order influence for markets, US President Donald Trump, also created favourable reasons for Asian bulls to charge on," said IG Markets strategist Jingyi Pan.

"A seemingly constructive meeting between Mr Trump and Japanese Prime Minister Shinzo Abe, in addition to Mr Trump's backing of the 'One China' policy, could allay some trade concerns in Asia and set free into the market more bullish bets," she added.

The gains were fuelled by Wall Street's strong showing last Friday where all three major indices scaled fresh highs after Mr Trump whet investors' appetites by hinting at tax cuts and infrastructure spending.

Geopolitical concerns sparked by North Korea's weekend ballistic missile test failed to get in the way of the feel-good factor among traders, although they will be keeping a lookout for US Federal Reserve chair Janet Yellen's testimony today on monetary policy direction.

It was another action-packed weekend that set a positive start to the week for Asian markets.IG Markets strategist Jingyi Pan

Over the near term, DBS Equity Research has a cap of 3,150 for the STI, while profit-taking pullbacks should be supported at around 3,050.

"With upside limited for large caps that have performed well in the past one to two months, we see the likelihood of trading interest rotating into the small-mid caps that have under-performed the blue chips," it said.

The STI is up 7.94 per cent so far this year.

Yesterday's gains were led by Singtel, which rose five cents or 1.3 per cent to $3.96. United Overseas Bank climbed 16 cents or 0.8 per cent to $21.07.

Property stocks, City Developments, was up eight cents or 0.8 per cent at $9.59, while CapitaLand climbed one cent or 0.3 per cent to $3.50.

Large cap property stocks have staged strong gains this year and should these stocks continue to climb, they may see short-term profit-taking activities, said DBS Research.

"Speculators hoping for Budget 2017 goodies on property measures will likely be disappointed as local interest rates have yet to move up," it added.

DBS Bank fell six cents or 0.3 per cent to $18.91, while OCBC Bank closed unchanged at $9.75.

The three banks are due to release their earnings this week.

Ezra Holdings continued to be weighed down by concerns of a potential US$170 million (S$242 million) write-down of its subsea joint venture, losing 0.3 cent or 11 per cent to 2.4 cents.

Hutchison Port Holdings Trust slipped 2.5 US cents or nearly 6 per cent to 41.5 US cents after a weak earnings report card and a downgrade by OCBC.

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