Bulls And Bears

STI up on 'reassuring' oil price outlook

Price still volatile but enough lift provided, for 16 of 30 constituents to end in the black

Asian markets had another mixed day yesterday, with Singapore shares ending in the black.

The volatile oil price is proving a key signal for investors.

A recovery in Brent crude to over US$38 per barrel on the back of Kuwait's assurance that an output freeze by major producers is still likely helped push the benchmark Straits Times Index (STI) up 10.33 points or 0.37 per cent to 2,811.25.

Elsewhere, Hong Kong rose 0.15 per cent, Shanghai fell 0.08 per cent and Tokyo shed 0.11 per cent. This followed the 0.75 per cent drop on Wall Street overnight as wary investors took profit on the back of the recent rally.

A similar uncertainty is at play in Singapore, CMC Markets analyst Margaret Yang said.

"The gain (yesterday) was likely just a technical rebound from Tuesday due to the surge in oil prices, but the prices - and the stock market - may retreat again after the weekly oil inventory report," she told The Straits Times, referring to US oil inventory data out late last night. The stockpile is at record highs for seven straight weeks.

Against this backdrop, "the STI will continue its consolidation until at least the end of this month when the release of company results paints a clearer picture", Ms Yang warned.

Still, there was enough lift yesterday for 16 of the 30 STI constituents to end in the black.

Keppel Corp put on 10 cents or 1.8 per cent to $5.65, and Sembcorp Marine rose 2.5 cents or 1.62 per cent to $1.565, benefiting from better oil prices.

Outside the STI, Ezra Holdings added 0.8 cent or 8.6 per cent to 10.1 cents, with 110.6 million shares transacted.

Genting Singapore was one of the top STI gainers, up three cents or 3.7 per cent to 84 cents.

Property counters City Developments and UOL Group also rose. CDL closed up 13 cents or 1.57 per cent at $8.43, and UOL added four cents or 0.68 per cent to $5.88.

Meanwhile, Golden Agri-Resources was down one cent or 2.35 per cent to 41.5 cents, and the Singapore Exchange (SGX) dropped 14 cents or 1.8 per cent to $7.64.

In an after-market announcement, SGX said its total securities turnover value rose 13 per cent month-on-month and 9 per cent year-on-year in March, when the bourse welcomed one new Catalist listing - gold mining firm Anchor Resources, which pared 0.9 cent or 8.7 per cent to 9.5 cents yesterday.

Ascendas Real Estate Investment Trust lost three cents or 1.25 per cent to $2.37, but Ascendas Hospitality Trust plunged eight cents or 10.46 per cent to 68.5 cents, on news that the trust manager has called off its plan to be acquired by bidders including Blackstone Group and Gaw Capital Partners.

Back in the offshore and marine sector, Mermaid Maritime shot up 2.9 cents or 27.1 per cent to 13.6 cents, drawing an SGX query.

A version of this article appeared in the print edition of The Straits Times on April 07, 2016, with the headline 'STI up on 'reassuring' oil price outlook'. Print Edition | Subscribe