Wall Street gains help lift Singapore stocks, Asian markets

A file picture of the SGX Centre. PHOTO: SPH
A file picture of the SGX Centre. PHOTO: SPH

SINGAPORE - Singapore stocks started the new week on a firm note, thanks in part to gains on Wall Street last week.

The benchmark Straits Times Index (STI) advanced 17.34 points, or 0.54 per cent, to 3,246.35 on Monday (July 10), although turnover across the bourse was thin at 1.22 billion shares worth S$805.5 million.

The Dow Jones Industrial Average in the United States added 0.44 per cent last Friday on numbers that showed hiring picked up more than expected in June.

This helped lift most other markets in Asia as well: Tokyo rallied 0.76 per cent, Hong Kong rose 0.63 per cent and Sydney put on 0.36 per cent. But Shanghai bucked the trend, shedding 0.17 per cent.

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"While the market continues to take comfort in the fact that the (US Federal Reserve's) relatively accommodative conditions have been creating jobs within the economy, the lack of translation to wage growth may remain a perplexing development that could trigger concerns if sustained in the longer run," noted IG market strategist Pan Jingyi.

Ms Pan added that the Fed's testimony to Congress last week reinforced the Fed's recent views that a gradual increase in interest rates is to be expected on the back of positive economic conditions.

"The devil will be in the details when Federal Reserve chair Janet Yellen appears before Congress this week," she said.

Much of the gains on the STI on Monday were led by Singtel, up by 1 per cent or four cents to S$3.90. The telco has priced the initial public offering of its unit NetLink NBN Trust at 81 cents per unit in a S$2.35 billion listing that is set to be the largest on the Singapore Exchange in recent years.

The local banks also fared well: OCBC Bank gained 1 per cent or 11 cents to S$10.80, DBS Group Holdings rose 0.8 per cent or 17 cents to S$21, and United Overseas Bank climbed 0.4 per cent or nine cents to S$23.31.

Commodity plays, on the other hand, were among the biggest laggards. Golden Agri-Resources lost 1.3 per cent or half a cent to 37.5 cents, and Wilmar International pared 0.6 per cent or two cents to S$3.32.

OCBC Bank economist Barnabas Gan noted in a recent report that unlike previous years where Ramadan celebrations seasonally lifts palm oil prices, this year's palm oil fundamentals have been "starkly different", given market concerns over ballooning production.