Business

Good vibes in Wall Street to lift STI

After a week of range-bound trading, the benchmark Straits Times Index is likely to start the trading week on higher ground - taking the cue from Friday's Wall Street rally.

The Dow Jones Industrial Average closed 1 per cent up at 26,412.30 on Friday.

The broad-based S&P 500 advanced 0.7 per cent to 2,907.41, its first close above 2,900 in more than six months, while the tech-heavy Nasdaq Composite Index climbed 0.5 per cent to 7,984.16.

On the performance of the New York Stock Exchange, SPI Asset Management head of trading and market strategy Stephen Innes told The Business Times it was such an encouraging performance in US equity market, it is hard for investors not to be enthusiastic.

"Spring has sprung, green shoots abound and dovish central bank bias is buttressing investor sentiment," he said.

Investors will also be listening in on developments from the US and Japan trade talks today and tomorrow.

Buoyed by the rally in the US market, Mr Innes expects trading in Singapore and the rest of Asia to open today with a "very positive vibe".

With companies in Singapore also due to report their first quarter performance in the coming weeks, Mr Marcus Toh, principal trading representative at Phillip Securities, said investors are likely to shift to profit-taking mode as many companies have rallied this year.

There could also be growing interest in construction counters after Friday's first quarter gross domestic product (GDP) advanced estimates showed that the sector expanded 1.4 per cent, following 10 consecutive quarters of decline, a remisier postulated.

Mr Geoff Howie, the Singapore Exchange's market strategist, explained that the construction sector's performance is "somewhat in pace with the five biggest Singapore-focused construction stocks".

"Chip Eng Seng, KSH Holdings, Boustead Projects, Lian Beng Group and Wee Hur Holdings have averaged 14 per cent total returns in the 2019 year thus far," he noted.

While not loaded, the local economic docket has a key release on Wednesday with March's non-oil domestic export data due.

A Bloomberg poll suggests that exports will fall 5 per cent month on month and 1.9 per cent year on year following a strong showing in February.

The Singapore market - like many others in the region -will not see a full week of trading due to the Good Friday holiday on April 19.

Among economies in Asia, a slew of key data releases will be out in China.

Among them are the industrial production data for March and also Q1 GDP figures.

Of the Chinese data releases, Mr Lukman Otunuga, research analyst at FXTM said: "While last month's PMI data showed signs that the world's second largest economy is stabilising, more data points adding to that narrative could sooth concerns over the Chinese economy and potentially boost risk-on sentiment as well."

In South-east Asia, much focus will be on the elections in Indonesia, which takes place on Wednesday.

More than 190 million people will go to the polls to elect a new president, the vice-president and members of the People's Consultative Assembly on the same day for the very first time, United Overseas Bank economist Alvin Liew said.

Among Asia-Pacific central banks, only the Bank of Korea has a monetary policy decision to make, with a Bloomberg poll of economists, showing that the policy rate is likely to stay unchanged at 1.75 per cent.

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