A day of modest gains for Asian stocks, STI ends 5 points up

SINGAPORE - Asian stocks mostly clocked modest gains on Tuesday, tracking a rally in Japanese equities amid a broader lack of positive catalysts.

The benchmark Straits Times Index (STI) was nearly flat, climbing just 5.41 points, or 0.19 per cent, to 2,814.65.

Tokyo rose 1.1 per cent as the yen retreated after a seven-day rally, which helped lift sentiment elsewhere in the region, though only by a small extent.

Hong Kong inched up 0.3 per cent, Seoul added 0.6 per cent, Sydney grew 0.9 per cent and Jakarta advanced 0.7 per cent.

Shanghai lost 0.3 per cent, dragged down by property and technology shares as traders moved to lock in profits from the previous day's rally.

Analysts believe the yen will remain in focus given the lingering concerns over Japan's economic fundamentals.

"Investors are frustrated about the lack of effective measures against the strong yen," Mr Hikaru Sato, a senior technical analyst at Daiwa Securities in Tokyo, told Reuters. "Confidence in Japanese stocks has waned since the end of last year and it still hasn't recovered."

Wall Street put up a lacklustre showing on Monday, dipping by a marginal 0.1 per cent as corporate earnings season - forecast as the worst since the financial crisis - began.

Among the 30 STI constituents, 10 stocks rose - with telco Singtel as one of the gainers, putting on three cents or 0.8 per cent to S$3.69, while SIA Engineering gained four cents or 1.1 per cent to S$3.62.

Agri-business giant Wilmar International grew two cents or 0.6 per cent to S$3.41. An OCBC Investment Research report said that while it shares the management's optimism about the group's long-term prospects, the near-term valuations are "not as attractive".

It maintains a "hold" call on the stock, noting that the recent pullback in sugar prices could also spell some near-term earnings volatility.

The local banks were a mixed bag: DBS Group Holdings edged up two cents or 0.1 per cent to S$15.08 and United Overseas Bank put on 14 cents or 0.8 per cent to S$18.70. OCBC Bank, on the other hand, slipped one cent or 0.1 per cent to S$8.86.

Turnover across the bourse was thin at 978.7 million worth just S$663.9 million.

tsjwoo@sph.com.sg