BullsandBears

Regional markets continue their rebound

But remisiers warn that rally may prove fragile with key China data due on Monday

Singapore shares joined regional markets in another bullish session that lifted indexes to multi-week highs. But the strength of the rally is uncertain as the choppy economic outlook may dampen sentiment, remisiers cautioned.

The MSCI Asia ex-Japan index gained 0.2 per cent yesterday, with the Shanghai Composite putting on 1.6 per cent for the day and 6.5 per cent for the week, its best performance in four months.

This followed the 1.28 per cent jump by the Dow Jones Industrial Average overnight, due partly to better-than-expected results by major corporates such as Citigroup.

"You may have no rate hike this year from the Federal Reserve and an extension of stimulus in Europe and in Japan, so that's giving a boost to equities. At the same time, crude rebounded and earnings in the United States were not so bad,'' Mirabaud Securities trader John Plassard told Reuters.

Taking its cue from Wall Street, Kuala Lumpur also gained 0.21 per cent to its highest level since early August as Tokyo rose 1.08 per cent.

Singapore's benchmark Straits Times Index gained 0.51 per cent or 15.47 points to 3,030.61. For the week, the STI added 1.07 per cent.

Remisier Chung Chun He told The Straits Times: "We're seeing a nice rebound for the local market, but I think it's still too early to tell whether this is a sustainable recovery. The global economic outlook is still very much a concern, and markets will likely go south the moment new downbeat data comes out.''

The next key data will be the official growth figure from China, to be released on Monday. Most market watchers are bracing themselves for a growth rate below 7 per cent, and how low it goes will dominate the market mood in the coming week.

Still, there were plenty of bright spots on the local market. Noble Group gained for a third straight day. Shares in the commodity giant rose one cent or 2.02 per cent to 50.5 cents. This marked a 32.9 per cent surge since Oct 6 when Noble hit a 12-month low of 38 cents.

But Mr Chung doubted the embattled firm - which has been fighting both short-sellers and a global commodity down-cycle for almost a year - has truly turned a corner.

"It rose as part of the market, but fundamentals of the company and its business environment remain unchanged. I don't expect any pleasant surprises in its third-quarter results," he said.

Hongkong Land Holdings ended 13 US cents or 1.73 per cent higher at US$7.63, and Yangzijiang Shipbuilding rose two cents or 1.6 per cent to $1.27.

Outside the STI, Singapore Post jumped eight cents or 4.47 per cent to $1.87. This followed news that the company plans to acquire e-commerce unit Trade Global in the US to expand its business.

Meanwhile, Sats pared nine cents or 2.38 per cent to $3.69, and Thai Beverage lost 1.5 cents or 2.16 per cent to 68 cents.

A version of this article appeared in the print edition of The Straits Times on October 17, 2015, with the headline 'Regional markets continue their rebound'. Print Edition | Subscribe