Asian stocks rally on strong US data, STI closes 16 points up

The benchmark Straits Times Index (STI) climbed 16.43 points, or 0.6 per cent, to 2,766.66.
The benchmark Straits Times Index (STI) climbed 16.43 points, or 0.6 per cent, to 2,766.66.ST PHOTO: LIM YAOHUI

SINGAPORE - Asian stocks made a solid comeback on Wednesday, taking their cue from positive data in the United States.

The Straits Times Index (STI), in line with the region-wide rally, climbed 16.43 points, or 0.6 per cent, to 2,766.66.

Data which showed the Singapore economy expanded modestly during the first quarter likely put a dampener on sentiment, while International Enterprise Singapore slashed export forecasts for the year amid a weaker trade outlook.

Wall Street rode high on confidence on Tuesday, rising 1.22 per cent following a report that said new-home sales in April surged to their highest in more than eight years.

This helped allay fears over the impending interest rate hikes, expected to come into play as soon as June.

"Strong US new home sales have added credence to the Fed's claims that the US economy may be strong enough for another rate hike in June or July," Mr Angus Nicholson, a Melbourne-based market analyst at IG, told Bloomberg.

In Asia, Hong Kong rose 2.71 per cent, Tokyo grew 1.57 per cent, and Sydney put on 1.45 per cent.

Shanghai was an anomaly, slipping 0.23 per cent on yuan depreciation worries given the stronger greenback.

The three local lenders led gains in the index yesterday, with DBS Group Holdings up 15 cents or 1 per cent to US$15.31.

OCBC Bank advanced seven cents or 0.8 per cent to US$8.47, while United Overseas Bank grew 12 cents or 0.8 per cent to US$18.03.

The oil and gas-related plays also fared well as crude prices inched higher to levels of US$50 (S$69) a barrel. Keppel Corporation rose four cents or 0.8 per cent to S$5.27. Sembcorp Industries grew two cents or 0.7 per cent to S$2.76 while its rig-building arm Sembcorp Marine was unchanged at S$1.54.

Both SembMarine and Keppel said they have not been served with papers related to a reported damages suit by fund manager EIG Management Co against Petrobras, in response to a Reuters report that said EIG had also named SembMarine, Jurong Shipyard and Keppel in the suit.

A total of 1.05 billion shares worth S$793.7 million changed hands across the bourse.