Bulls And Bears

STI rises as investors look beyond Fed hike

Key Asian markets take cue from Wall Street to chalk up gains as US dollar stays strong

Wall Street resumed its winning ways to give several key Asian indices a lift yesterday as investors got over the Federal Reserve's seemingly hawkish view on United States interest rate hikes.

The Dow Jones Industrial Average added 0.3 per cent overnight to renew its push for a record high, while the benchmark Straits Times Index followed with a gain of 7.09 points or 0.24 per cent to 2,937.86.

But the STI was down by 0.62 per cent for the week, while volume dropped 31.3 per cent. Elsewhere, Shanghai was up 0.17 per cent and Tokyo added 0.66 per cent, but Hong Kong slipped 0.18 per cent and Sydney dropped 0.1 per cent.

"The market seemed to have digested the Fed rate hike and started to position itself for a brighter outlook in (the United States) economy and the changes Donald Trump's new administration could bring to the equities market," CMC Markets analyst Margaret Yang said.

Meanwhile, the US dollar continued to stay strong - holding at around 1.44 against the Singapore dollar. That put a lid on oil prices, with Brent futures dropping below US$54 a barrel.

There were 12 gainers among the 30 STI stocks, with Sats leading the pack. It jumped 13 cents or 2.69 per cent to $4.97, while Wilmar International rose nine cents or 2.49 per cent to $3.70.

All three banks gained, likely due to market expectations on margin improvements as the three-month Singapore Interbank Offered Rate increased to 0.96555 per cent yesterday. The Sibor is commonly used to price bank loans, and it is now closest to the 1 per cent mark since June.

DBS rose 10 cents or 0.56 per cent to $18.03, OCBC added three cents or 0.33 per cent to $9.18 and United Overseas Bank advanced three cents or 0.14 per cent to $20.93.

Jardine Cycle & Carriage dropped the most among the 12 STI losers, down $1.21 or 2.95 per cent to $39.87. Genting Singapore pared 1.5 cents or 1.56 per cent to 94.5 cents on 41.4 million traded shares.

The offshore and marine counters also did not fare well. Keppel Corp closed down nine cents or 1.48 per cent at $6, while Sembcorp Industries dropped two cents or 0.68 per cent to $2.91.

There were also active gainers outside the STI, including film company Spackman Entertainment Group, which was up 0.3 cent or 1.63 per cent to 18.7 cents on 53.1 million shares traded. Video technology firm Artivision Technologies put on 0.3 cent or 13.64 per cent to 2.5 cents with 42.6 million shares changing hands.

In the gold mining sector, CNMC Goldmine closed at 41 cents and Wilton Resources closed at 6.4 cents - both ended flat. Anchor Resources dropped 0.2 cent or 2.22 per cent to 8.8 cents.

The price of gold will likely remain under pressure from the strong greenback. It recovered to around US$1,135 an ounce yesterday, but is still at its the lowest since February.

A version of this article appeared in the print edition of The Straits Times on December 17, 2016, with the headline 'STI rises as investors look beyond Fed hike'. Print Edition | Subscribe