Bulls And Bears

STI climbs to fresh 21/2-year high

Bumper US jobs report, end of first part of Brexit talks help lift local market

There was so much good news to latch on to yesterday that it was no surprise the local market hit levels not seen since mid-2015.

A bumper United States jobs report on Friday night and the successful conclusion of the first part of Brexit talks between Britain and the European Union were just the tailwinds market watchers were looking for after a week in the doldrums.

The key Straits Times Index finished 35.8 points or 1.05 per cent up at 3,460.45 - the highest since May 25, 2015, when the index hit 3,460.85. The rise sets the scene for the week ahead that is packed with meetings of central bankers and the release of global economic data.

Other major Asian bourses fared well too, with Japan's Nikkei 225 up 0.6 per cent, Hong Kong's Hang Seng rising 1.1 per cent and the Shanghai Composite climbing nearly 1 per cent.

But IG Markets' analyst Jingyi Pan sounded a warning: "We are at the fore of a week filled with event risks and it would be of little surprise to see investors exercising caution."

The US had released mixed data last Friday. The job numbers for last month outperformed, due in large part to there being no distortions from the hurricane season. This has lent further confidence for the Federal Reserve to lift rates this week.

But low wage growth added to uncertainty for hikes into the new year.

Most tip the Fed to lift rates tomorrow so more focus will be on the economic projections.

"At the moment, the three rate hikes the Fed is projecting for 2018 look reasonable, but the risk is that tax cuts push them to be more aggressive," said Bank of Singapore chief economist Richard Jerram.

However, the tax Bill has still not been passed by Congress, so it might be too early for the impact to be reflected at the Fed meeting, he added.

The European Central Bank and Bank of England meet on Thursday and are expected to hold rates steady while hints of their monetary stances will be examined.

Turnover on the local bourse stood at 1.5 billion shares worth nearly $1 billion, with gainers outpacing losers 254 to 183.

Exuberance surrounded ComfortDelGro following last Friday's announcement that it was taking a majority stake in Uber's rental car business with the stock jumping 12 cents or 6.3 per cent to $2.03. It was one of the most active with 39 million shares worth $77 million done.

Troubled Noble Group bounced 1.6 cents or 13 per cent to 14.2 cents to reverse the falls in the previous three sessions.

A version of this article appeared in the print edition of The Straits Times on December 12, 2017, with the headline 'STI climbs to fresh 21/2-year high'. Print Edition | Subscribe