Business

S'pore shares move up despite headwinds

STI closes at 3,220.66, up 12.92 points or 0.4 per cent, as advancers outpace decliners 214 to 154 with trading volume of 1.08 billion

The local market spent much of the trading day lower before reversing those losses, showing resilience at a time when equity markets are mostly facing headwinds - with the exception of the hopes of a US Federal Reserve rate cut.

Thanks to the rally in the afternoon session, Singapore's Straits Times Index (STI) closed at 3,220.66, up 12.92 points or 0.4 per cent.

CMC Markets' analyst Margaret Yang said that the STI was lifted by real estate and technology counters, and the benchmark has continued to hold above its short-term key support of 3,200 points.

It was a mixed bag among other Asia-Pacific markets.

Hong Kong, embroiled in protests from residents over an extradition bill, managed to close mildly lower after falling by as much as 1.8 per cent.

Japan and Malaysia also trended lower. Australia was flat, and China posted a modest gain.

Growth concerns continued to weigh on global sentiment as did US-China trade issues.

With the G-20 summit on June 28 and 29, market watchers had hoped until recently that the US and China would agree to a trade deal in Osaka. But both sides are not any closer to doing so, let alone having a timetable for a formal meeting.

US President Donald Trump also turned up the offensive on Germany for its lack of spending on defence and is considering slapping sanctions to block pipelines that would increase natural gas flow from Russia to Germany.

Adding to one of the bright spots on sentiment - rising Fed rate cut expectations - was US inflation clocking in below expectations on Wednesday.

ING's Asia economist Prakash Sakpal said: "US inflation data printed below consensus, adding to the case for a Fed rate cut with the economy showing signs of slowing."

With the muted inflation figure, Oanda senior market analyst Edward Moya noted that the "question is no longer will they (the Fed) cut, but by how much".

In Singapore, trading volume clocked in at 1.08 billion securities, 90 per cent of the daily average in the first five months of 2019.

Total turnover came to $1.02 billion, just under the January-to-May daily average.

Across the market, advancers outpaced decliners 214 to 154. The STI had six of its 30 components in the red.

Property developers and real estate investment trusts (Reits) remained in vogue, thanks to a dovish interest rate outlook. City Developments Limited advanced $0.23 or 2.5 per cent to $9.42 while Oxley Holdings added one Singapore cent or 3.2 per cent to $0.32.

RHB Research Institute initiated coverage on Oxley with a "buy" recommendation and a target price of $0.41.

RHB analyst Jerrick Seet said that concerns over Oxley's gearing level were overdone, and would be lowered by sales of its key assets.

Among Reits, CapitaLand Commercial Trust units added three Singapore cents or 1.5 per cent at $2.08.

Oil prices were close to five-month lows on Wednesday due to increased US crude stockpiles and lower demand, but rebounded yesterday.

DBS Equity Research analyst Yeo Kee Yan said in a report before prices rebounded that stocks to watch in anticipation of a subsequent rebound in Brent oil prices include SembCorp Marine (up two Singapore cents or 1.4 per cent to $1.49), SembCorp Industries (flat at $2.38) and Keppel Corp (up four Singapore cents or 0.6 per cent to $6.30).

Among the banks, DBS Group Holdings edged down two Singapore cents or 0.1 per cent to $24.68 and OCBC Bank dropped three Singapore cents or 0.3 per cent at $10.77. United Overseas Bank ended at $24.75, up $0.14 or 0.6 per cent.

On 37.7 million shares traded, Yangzijiang Shipbuilding was the benchmark index's most traded stock yesterday. The shipbuilder gained two Singapore cents or 1.4 per cent to close at $1.47.

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