Local shares edge up despite contraction of China's economy

Local investors shrugged off downbeat economic data from China to send shares marginally higher yesterday.

The modest jolt of optimism sent the Straits Times Index (STI) inching up 0.3 per cent or 8.52 points higher at 3,099.15 to end what had been a gloomy week on something of a high note.

Gainers and losers were in a dead heat at 234 each in the broader market with 1.1 billion shares worth $909.9 million changing hands.

Regional indexes were mixed as recession fears grew.

Japan's Nikkei 225 added 0.5 per cent, while South Korea's Kospi went up 0.4 per cent but the Hang Seng in Hong Kong dived 2.2 per cent, the Jakarta Composite shed 0.6 per cent and the Kuala Lumpur Composite fell 0.1 per cent.

It was a similar story in Australia, where shares dropped 0.7 per cent to end the week down 1.2 per cent.

The mixed session followed a day of red ink on Wall Street with the Dow Jones Industrial Average down 0.5 per cent, the S&P 500 off 0.3 per cent and the technology-focused Nasdaq 0.1 per cent lower .

It came a day after the United States reported that inflation surged to 9.1 per cent in June.

Chinese indexes also fell as the country reported a sharp economic contraction in the second quarter. The Shanghai Composite slid 1.6 per cent while Shenzhen shares fell 1.5 per cent.

China's GDP shrank 2.6 per cent in the second quarter from the previous quarter, against expectations of a 1.5 per cent decliner.

On the STI, Genting Singapore extended gains from the previous day, ending 7.3 per cent higher at 80.5 cents before trading was halted during the midday break.

It was also the most actively traded counter by volume among index components, with 112.8 million securities changing hands amid takeover speculation with Bloomberg reporting that investors are eyeing the casino operator as tourists return.