Business

STI stages rebound, erasing losses

Gains earlier this week wiped out by profit-taking

Expectations of a better nonfarm payroll and unemployment data from the US helped to give local stocks a push late in the day, even as some local earnings were weaker and growth remained modest for China's services sector in October.

The benchmark Straits Times Index (STI) edged up a touch on Friday to 3,382.31, up 1.81 points or 0.05 per cent, after retreating from an intraday high of 3,383.60.

Gains earlier in the week were wiped out by profit-taking, bringing the total loss for the week to about four points.

Turnover for the day came in thin at two billion worth S$0.9 billion or an average of S$0.45 a unit. Excluding warrants, gainers beat losers 211 to 207, indicating mixed trading.

Shares of Ascendas Reit and Thai Beverage chalked up a combined loss of almost three index points.

Ascendas Reit's counter lost seven Singapore cents to end at S$2.68, while Thai Beverage shares, among the most heavily traded, were down one Singapore cent to S$0.96 on a volume of 23 million.

Helping to lift the STI was the CapitaLand group of companies. CapitaLand, CapitaLand Commercial Trust (CCT) and CapitaLand Mall Trust (CMT) added a total of more than two points to the index.

"The appointment of (Jerome) Powell (as the new Federal Reserve chair is likely to bring more certainty and consistency."Margaret Yang, CMC Markets analyst

CapitaLand's stock closed up two Singapore cents at S$3.69, while CMT added two Singapore cents to finish at S$2.03. CCT, among the most active counters, ended up 4½ Singapore cents at S$1.795 on a volume of 22 million.

CCT on Wednesday completed the S$2.09 billion acquisition of Asia Square Tower 2 (AST2) - Singapore's second-largest office tower sale in history - from BlackRock Asia Property Fund III LP.

Meanwhile, CapitaLand's serviced residence arm, The Ascott Limited, on Monday said it has expanded its presence in Singapore with new contracts to manage two properties in the Central Business District and the new Ophir-Rochor Corridor.

Index heavyweight Singtel's shares gained two Singapore cents to close at S$3.77 on Friday.

Nomura had said in a recent report that Singtel was its favoured pick in the telco space.

Across the region, indices were mixed with Malaysian and New Zealand stocks ending lower.

Hong Kong's Hang Seng ended firmer on Friday though, as China slowdown worries were offset by the upbeat mood from strength on Wall Street.

Australian shares ended near their highest level in 2½ years, led by broad-based gains driven by materials and financials stocks. Japanese markets were closed for a public holiday.

On Friday, the Caixin/Markit services purchasing managers' index rose to 51.2 in October, up slightly from September's 21-month low but still much weaker than historical trends.

Over in the US, President Donald Trump's pick of Jerome Powell as the new Federal Reserve chair to replace Ms Janet Yellen, whose term expires in February, was within expectations.

It explains why the markets did not quite react to his nomination.

Margaret Yang, analyst at CMC Markets Singapore, said: "The appointment of Powell is likely to bring more certainty and consistency in terms of the Fed's monetary policy next year.

Market now anticipates another 25 basis point hike in December and three more hikes in 2018.

The US dollar index remains ranging at the 94.7 area, little changed from the last few days."

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

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