China stocks rally in final hour boosts regional markets, STI up 33 points

SINGAPORE - Asian equities mostly bounced back on Tuesday, lifted by a last-hour rally in Chinese stocks.

Shanghai posted gains for the first time in five days, rising 2.92 per cent, amid speculation that government funds had intervened to stabilise the market. Shenzhen surged 3.83 per cent.

"Trading is very volatile as the volume is extremely thin," Mr Castor Pang, head of research at Core-Pacific Yamichi Hong Kong, told Bloomberg.

"State funds may be focusing the purchase on some large companies including financials and helping with a rebound in the broader market."

The rally in mainland Chinese stocks came even as data showed a steep slide in the country's imports for August. Its exports, meanwhile, had fallen less than expected.

"This reinforced the narrative of a slowing China", noted IG market strategist Bernard Aw, pointing to concerns over the country's economic slowdown, which continue to mount.

Elsewhere in the region, Hong Kong jumped 3.28 per cent, while Singapore's benchmark Straits Times Index (STI) climbed 32.91 points, or 1.15 per cent, to 2,885.32.

Japan, however, lost 2.43 per cent, after a report confirmed its economy contracted in the second quarter.

At home, the three local banks clocked the day's biggest gains, led by OCBC Bank, which rose 16 cents or 1.8 per cent to $8.99.

DBS Group grew 26 cents or 1.49 per cent to $17.70, while United Overseas Bank added 15 cents or 0.78 per cent to $19.30.

The index was also propped up by Singapore Airlines, which added 32 cents or 3.25 per cent to $10.17

Agri-business group Olam International remained under the weight the commodities selldown, coupled with news that it will be dropped from the STI come Sept 21. It slid for the fifth consecutive day, down half a cent or 0.26 per cent to $1.955.

Other laggards included palm oil giant Wilmar International, which fell three cents or 1.14 per cent to $2.60, and telco firm Singtel, which slipped two cents or 0.55 per cent to $3.65.

The most active stock was oilfield services group Ezra Holdings, which saw some 89.97 million shares being traded.

The stock closed 0.2 cents or 1.55 per cent up at 13.1 cents, likely buoyed by news on Monday that its subsea services division Emas AMC has finalised a contract with mining giant BHP Billiton for the Angostura phase 3 development project in offshore Trinidad and Tobago.

Overall trading volume on the bourse amounted to $1.06 billion, with 1.19 billion shares changing hands.

Wall Street was closed on Monday for the Labour Day holiday.