Bulls And Bears

Asian bourses shake off fear as Wall Street rallies

Solid US corporate earnings provide respite from trade tensions

A solid performance from Wall Street overnight boosted confidence across the region after some unnerving market sessions over the past week.

Corporate earnings in the United States provided a respite from trade tensions, boosting the Dow and S&P 500 by more than 2 per cent each, while the Nasdaq surged nearly 3 per cent.

Local investors did not need any more hints as they sent the benchmark Straits Times Index up 36.79 points, or 1.21 per cent, to 3,071.10.

Gainers outnumbered losers 232 to 141 on turnover of 1.12 billion shares worth $898.7 million.

Yangzijiang Shipbuilding did its part to prop up the index, gaining 4 per cent to $1.31. DBS analyst Ho Pei Hwa noted last week that Yangzijiang has entered into a joint venture with Mitsui to set up a shipbuilding company in China.

She said the venture could lift the group's contract wins next year by 20 per cent and pave the way for Yangzijiang to get into building large-scale LNG carriers. The brokerage has reiterated a "buy" call on the counter, with a target price of $1.82.

Some real estate investment trusts (Reits) were in play, with CapitaLand Mall Trust up 2.8 per cent to $2.17, while First Reit added 1.7 per cent to $1.20.

For the first time this week, all three banking stocks gained.

OCBC Bank led the way, rising 1.7 per cent to $10.76, followed by United Overseas Bank, which was up 1.2 per cent to $25.63, and DBS, ahead 1 per cent to $24.49.

Brokerage UOB Kay Hian initiated coverage on industrial agri-food company Japfa yesterday, noting that it is on a "strong turnaround path from 2018 onwards".

It has issued a "buy" rating with a target price of 90 cents - a 47.5 per cent upside to the counter's closing price of 61 cents on Tuesday.

Jiutian Chemical fell 16.1 per cent to 2.6 cents. The Catalist-listed firm said on Tuesday that it expects to report a net loss for the quarter ended Sept 30. Its results are due by Nov 14.

IEV Holdings fell 11.6 per cent to 3.8 cents after it recently announced that it intends to dispose of its stake in a loss-making unit to eventually exit from the mobile natural gas business in Indonesia.

Elsewhere, equities echoed the Wall Street cheer, with Japan's Topix up 1.54 per cent and South Korea's Kospi adding 1.04 per cent.

Australia's S&P/ASX 200 rose 1.2 per cent, its largest intra-day gain in almost four months.

Hong Kong was closed for a public holiday while Chinese stocks finished 0.6 per cent higher.

A version of this article appeared in the print edition of The Straits Times on October 18, 2018, with the headline 'Asian bourses shake off fear as Wall Street rallies'. Print Edition | Subscribe