Business

STI bounces back to grow 0.4%

Banking stocks, Genting Singapore, Singtel, Dairy Farm helped lift index by 11.66 points to 3,038.65

Singapore equities staged a comeback to end the session stronger, but not before dipping in the early morning trade following a sharp sell-off in US tech stocks overnight.

Head of research at London Capital Group Jasper Lawler said: "The bounce in the oil price overnight has played a significant role in calming nerves. There is also some sense that perhaps emerging markets have seen the worst of the declines, while the US tech sector may still has worse to come."

The benchmark Straits Times Index (STI) advanced 11.66 points, or 0.4 per cent to 3,038.65. Losers outnumbered gainers 219 to 159, after about 1.25 billion shares worth $789.6 million changed hands.

This paled in comparison to Tuesday's turnover of $925.4 million, against a churn of 1.44 billion shares.

The most heavily traded counter was Genting Singapore, which gained 1.6 per cent or 1.5 cents to 93.5 cents, with some 29.2 million shares traded. Across the board, analysts seemed upbeat about prospects for the casino operator.

RHB has issued a "buy" recommendation with a target price of $1.23 citing a "stable outlook", while DBS has a "buy" rating with a target price of $1.55.

Also propping up the STI was Dairy Farm International which rose 1.7 per cent or 15 US cents (21 Singapore cents) to US$8.90, and Thai Beverage, which gained 1.6 per cent or one cent to 65.5 cents.

Banking stocks also ended higher. United Overseas Bank rose 1 per cent or 25 cents to $24.10, OCBC Bank was up 0.7 per cent or eight cents to $10.89 and DBS Bank gained 0.4 per cent or 10 cents to $23.

Singtel inched up 0.3 per cent or one Singapore cent to $3.08 on turnover of 23 million shares.

Nonetheless, IG market analyst Pan Jingyi noted that among the sectors, the slump in energy stocks would likely be a major headwind for regional markets in the session.

Golden Agri-Resources dipped 2.1 per cent or 0.5 cent to 23 cents, while China Aviation Oil lost 1.6 per cent or two cents to $1.20 apiece.

Noting that oil prices plunged 6 per cent to 7 per cent on Tuesday, DBS analysts said: "Technically, Brent should find support at US$57 to US$61 a barrel, as Opec (Organisation of the Petroleum Exporting Countries) is likely to agree on production cuts at their semi-annual meeting on Dec 6; rebound resistance is seen at US$67.50 to US$70 a barrel."

They said oil and gas counters such as Sembcorp Marine and Sembcorp Industries could also see limited near-term downside, given the anticipated support and rebound in oil price.

Despite its announcement it clinched a project worth some 330 million yuan (S$65.5 million), shares in waste treatment company China Jinjiang Environment Holding fell 2.2 per cent or one cent to 44 cents.

First Reit rebounded 1.5 per cent or 1.5 cents to 99 cents, after tumbling 16 per cent in the previous three days. After market close, First Reit's manager Bowsprit Capital said it was not aware of any material information that could have accounted for the plunge.

Separately, Singapore is set to announce its third-quarter gross domestic product (GDP) figures today. Asked how this might affect the markets, Ms Pan said: "On the GDP reading, expectations are for a downward revision to 2.4 per cent in year-on-year terms. Unless we find a significant disappointment, the backward looking data is unlikely to ignite significant reactions."

On the currency front, FXTM research analyst Lukman Otunuga said: "The lack of appetite for risk and overall market caution soured appetite for some emerging market currencies. A clear example was the Chinese yuan which slightly weakened against the dollar..."

Asian markets closed mixed as Japan, South Korea and Australia fell, while Hong Kong and China posted gains.

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