Strong gains in US markets fuel STI's rise

Asia markets mostly optimistic, with Nikkei soaring to best close in six months

The Straits Times Index (STI) ended yesterday up 32.77 points, or 1.28 per cent, to 2,595.97 points, fuelled by strong gains in the United States markets and extending a two-day upward movement.

The two Jardine conglomerates, Jardine Matheson Holdings and Jardine Strategic Holdings, both trading cum-dividend, took the top two positions in the STI gainers chart.

Jardine Matheson shares rose US$0.83 to US$41.40, reversing a US$0.47 loss on Wednesday; Jardine Strategic gained US$0.75 to US$20.70.

Jardine Matheson had earlier declared a flat interim dividend of 44 US cents and Jardine Strategic, 10.5 US cents.

Sembcorp Marine, which will be hived off from STI stock Sembcorp Industries, saw its share price slide 30 per cent, or 10.5 cents, to $0.245 on the first day of ex-rights trading. It is raising $2.1 billion from a highly dilutive five-for-one renounceable rights issue of up to 10.5 billion new shares at an issue price of 20 cents each.

Penny stock Jiutian Chemical was the most heavily traded stock with a trading volume of 383.4 million, adding 1.8 cents to 3.6 cents.

Advancers outnumbered decliners 295 to 173 for the day, with 2.35 billion securities worth $1.6 billion changing hands.

Regional markets were mostly optimistic.

Japan's Nikkei 225 Index soared 1.78 per cent, the best close in six months, buoyed by overnight surges on major markets and increasing hopes for an economic recovery.

A string of recent indicators, including solid US jobs data, "show macroeconomic data are gaining momentum towards recovery", Okasan Online Securities said in a note. "Sell-on-rally moves kept a cap on gains. Still, the strength of other Asian markets helped encourage buying and kept (the Nikkei) at a high level."

Neighbouring South Korea's Kospi Index was up 0.21 per cent, as market sentiments improved on hopes for further fiscal stimuli as well as a surprise jump in US inflation.

The FTSE Bursa Malaysia Kuala Lumpur Composite Index gained 1.27 per cent.

But Hong Kong saw the glass half-empty as the Hang Seng Index closed with small losses on concerns about the lack of progress in US stimulus talks, tempering hopes for a recovery from the coronavirus pandemic. The benchmark dropped 0.05 per cent.

Australia's S&P/ASX 200 index fell 0.67 per cent, weighed down by a flurry of poor corporate earning forecasts.

A version of this article appeared in the print edition of The Straits Times on August 14, 2020, with the headline 'Strong gains in US markets fuel STI's rise'. Print Edition | Subscribe