Local market in wait-and-see mode

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Strong Wall Street spills over to Asian stocks; STI up 6.64 points as investors await Singapore GDP, inflation figures due today

Local traders were cautious yesterday, ahead of the domestic growth and inflation numbers out today - but it was a good day for world markets, on the whole.

The benchmark Straits Times Index closed up a smidgen - by 6.64 points, or 0.19 per cent, to 3,430.02. Gainers closely outnumbered losers 231 to 218. This was enough to send the index to its highest since May 2015.

CMC Markets Singapore analyst Margaret Yang noted that Prime Minister Lee Hsien Loong's hints of an impending tax hike have not yet hit trading activity, "as markets take more of a gradual 'phase-in' and expect Government to conduct proper communication with the public before executing any tax hikes".

Blue-chip stalwarts up for the day included Singtel, which was higher by $0.01, or 0.27 per cent, to $3.70.

Keppel Corporation, whose Keppel Land unit is shedding a Bali site that languished for years despite a planned redevelopment, closed up by $0.04, or 0.53 per cent, to $7.53.

DBS Group Holdings added $0.45, or 1.85 per cent, to $24.84, while OCBC Bank finished higher by $0.09, or 0.76 per cent, to $12.01.

United Overseas Bank dipped by $0.02, or 0.08 per cent, to $25.77. Still, DBS Equity Research said in a report: "The Singapore banks have had a fantastic rally this year."

Analysts added in the report that "we believe the banks' ability to keep a clean asset quality trend would be the most crucial factor to shift valuations above mean".

In real estate news, New Wave Holdings continued to waver on the failure of Jalan Besar Plaza's collective sale tender, losing 0.1 Singapore cent, or 7.14 per cent, to 1.3 Singapore cents.

Meanwhile, UOL Group Limited, obliged to consolidate its 99.683 per cent stake in Singapore Land (SingLand) in a mandatory unconditional cash offer, sank by $0.10, or 1.12 per cent, to $8.86.

The stock had previously got a fillip from UOL upping its interest in United Industrial Corporation (UIC), which owns SingLand. UIC itself put on $0.06, or 1.81 per cent, to $3.38.

The Dow closed up by 0.69 per cent on Tuesday, and the Nasdaq by a strong 1.06 per cent, with gains in tech equities helping United States investors to shake off worries over tax reform's prospects in Congress.

In Asia, Seoul was up by 0.39 per cent, Tokyo by 0.48 per cent and Shanghai by 0.59 per cent.

Over in Hong Kong, the Hang Seng jumped to its highest in a decade, rising by 0.62 per cent to cross 30,000. It was helped generously by Chinese giant and WeChat owner Tencent, which recently became the first Asian tech company to gain a market capitalisation of more than US$500 billion (S$676 billion).

Mr Kevin Tam of Core Pacific Yamaichi told AFP that the Hang Seng's upward movement "is quite solid".

Over in Europe, even the political crisis in Germany, where the possibility of a coalition government has been torpedoed, could not dampen the euro's recovery.

Mr David Lafferty of Natixis Investment Managers said Chancellor Angela Merkel may be working on "less stable ground" but added that this "is not a near-term market event".

"We have already seen the euro stabilise and the DAX is pushing higher."

All eyes today will be on Singapore's final gross domestic product figures for the third quarter, due at 8am, and inflation numbers, set for release at 1pm.

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