Regional bourses show strong gains as Fed rate hike delay in sight, STI closes 1% up

A file picture of a man looking at share prices board in Tokyo. PHOTO: AFP
A file picture of a man looking at share prices board in Tokyo. PHOTO: AFP

SINGAPORE - Asian markets got some spring back in their step on Thursday, chalking up strong gains across the region as investors bet that the Federal Reserve looks set to delay the rate hike potentially to next year.

In another data-dominated session, all key markets in Asia cheered after official US data released overnight showed that retail sales rose only 0.1 per cent in September, while retail sales in August were revised to show no growth.

This added to market hopes the Fed will not raise interest rates in December as previously expected.

Barclays senior economist Leong Wai Ho told The Straits Times: "This is the dark before dawn in the US, where consumer demand typically picks up towards Christmas.

"But the Fed will want to see its glide path laid out properly. It will wait for more data to confirm the timing for rate hike, which we think will be in March next year instead December this year."

Reflecting that sentiment, regional benchmark MSCI Asia ex-Japan shot up to its highest level since mid-August.

Shanghai jumped 2.32 per cent and Hong Kong added 2 per cent, with investors there also expecting Beijing to announce more stimulus measures to stabilise the flagging economy, possibly in the Communist Party five year plan meeting between Oct 26 and 29.

Tokyo rose 1.15 per cent ase Kuala Lumpur added 0.12 per cent.

In Singapore, the benchmark Straits Times Index closed 31.22 points or 1.05 per cent higher at 3,015.14, staying above the 3,000 resistance level through the day.

Noble stayed in the spotlight, again one of the top active counters in the market with 56 million shares transacted. Its shares also rose for the second day, up two cents or 4.21 per cent to 49.5 cents.

Jeffries analyst Abhijit Attavar gave Noble a buy call, despite global commodity woes that have also battered companies such as Glencore.

"Noble has a significantly different asset mix and earnings composition as compared to Glencore," he said in a note.

Wilmar International rose seven cents or 2.43 per cent to $2.95, and SATS was up seven cents or 1.89 per cent to $3.78.

All three local banks resumed their mini-rally since the start of October after the blip this week, with DBS Group Holdings gaining 22 cents or 1.26 per cent to $17.65. OCBC was put on 11 cents or 1.19 per cent to $9.32, and United Overseas Bank rose 26 cents or 1.31 per cent to $20.07.

whwong@sph.com.sg