BULLS AND BEARS

Asian markets get a lift from Japan news

Regional bourses gain despite dip in Wall Street but analysts do not expect rally to last

Asian markets mostly notched up modest gains yesterday, led by Japan, in a generally positive start to the new week.

The Straits Times Index (STI) reversed losses in morning trade to climb a mere 1.15 points, or 0.04 per cent, to 2,736.06.

Sentiment in the region received a much-needed boost following news that Japan's government may postpone a planned sales tax rise - lifting Tokyo by 0.33 per cent.

This also helped offset disappointing April economic data from China over the weekend.

Shanghai and Hong Kong each gained 0.84 per cent, Sydney rose 0.56 per cent and Seoul inched up 0.05 per cent.

The unspectacular region-wide rally came even though Wall Street fell 1 per cent last Friday, as a jump in retail sales data revived speculation the Federal Reserve may lift rates as early as next month.

Analysts are unconvinced the gains will continue. "It's more of a short-term, minor rebound since the markets have been oversold," Mr Kelvin Wong, chief technical strategist for Asia at City Index, told The Straits Times.

"Stronger economic fundamentals are still lacking. If you look at China, it's starting to show weak numbers. Earnings in the United States are also not much of a catalyst for markets to drive higher."

He said Japan's economic growth figures, due tomorrow, will be watched closely. The nation is expected to have narrowly avoided falling into recession in the first quarter.

At home, Thai Beverage Public Company was among the biggest blue chip winners, jumping eight cents or 10.7 per cent to 83 cents. The group on Friday reported a strong set of first-quarter results, with net profit rising 30 per cent to 8.56 billion baht (S$332 million).

ST Engineering also did well, rising eight cents or 2.6 per cent to $3.16. Logistics firm CWT grew two cents or 0.9 per cent to $2.14, after confirming its controlling shareholders have signed an exclusivity agreement to negotiate a sale of its shares to China conglomerate HNA Group, which could trigger a general offer for CWT.

Penny stocks were in heavy play.

Annica Holdings, Blumont Group, LionGold Corp and Jadason Enterprises received trading queries from the Singapore Exchange. Blumont and Jadason both said they are not aware of the reasons behind the unusual activity.

Annica, flat at 0.1 cent, was the day's top active with a volume of 556.7 million shares, while Jadason rocketed up 2.8 cents or 215.4 per cent to 4.1 cents.

A total of 2.61 billion shares worth $848.1 million were traded across the bourse.

A version of this article appeared in the print edition of The Straits Times on May 17, 2016, with the headline 'Asian markets get a lift from Japan news'. Print Edition | Subscribe