Bulls And Bears

Asian stocks perk up as US-Iran tensions cool

After whipsawing on Wednesday, STI posts trouble-free session the day after

Fears of a wider conflict between the United States and Iran ended as quickly as they flared up, injecting renewed optimism across Asia's markets in the process.

US President Donald Trump saw no need to respond to Wednesday's missile attacks by Iran on bases housing US troops as there were no casualties.

"Iran's retaliation against the US killing (of) a top Iranian commander looks like it was designed to avoid further escalating the situation," AxiTrader chief Asia market strategist Stephen Innes said.

With tensions dialled down for now, sentiment has returned to recent, familiar levels.

Oanda Asia-Pacific senior market analyst Jeffrey Halley said in a note to clients: "That all means that it will be back to business as usual, in other words, getting (into) long (positions) in the Asian post-trade agreement recovery trade, buying equities anywhere, and generally hunting for yield in any form."

The benchmark Straits Times Index (STI), which whipsawed on Wednesday, had a relatively trouble-free session yesterday, closing at 3,247.48, up 1.59 points or 0.05 per cent.

The STI was little moved but it did not surprise traders, especially after many picked up counters on the dip on Wednesday after Iran said it was not looking for an escalation of tensions or a war with the US.

Elsewhere in the Asia-Pacific, Australia, China, Japan, Hong Kong, Malaysia, South Korea and Taiwan posted comfortable gains, with Japan's Nikkei 225 faring best. The benchmark gained 2.3 per cent, supported not only by a lift in sentiment but also a cheaper yen.

Trading volume here clocked in at 1.91 billion shares worth $1.37 billion, with gainers beating losers 257 to 166.

Genting Singapore was the STI's most active counter, closing unchanged at 92.5 cents on trade of 29.8 million.

Singtel dipped 0.9 per cent to $3.36 after associate Bharti Airtel announced it will be raising US$3 billion (S$4 billion) through a mix of debt and equity.

Citi Research analyst Arthur Pineda maintained his "buy" recommendation on Singtel on grounds that Airtel's capital-raising exercise is unlikely to impact its dividend prospects. "We estimate average free cash flow to sufficiently cover the dividends at 17.5 cents per year," Mr Pineda said.

Among firms in the second line, Centurion Corporation added 4.4 per cent to close at 47.5 cents.

A version of this article appeared in the print edition of The Straits Times on January 10, 2020, with the headline 'Asian stocks perk up as US-Iran tensions cool'. Print Edition | Subscribe