Bulls And Bears

Markets end tough week on a higher note

Shares rally on news of more US-China talks, though analysts still advise caution

Trade tensions roiled global markets this week and drove Asian bourses into their longest sell-off in 16 years before news of more talks between the United States and China rallied shares on Thursday.

Even Wall Street breathed a sigh of relief, with the S&P 500 and Dow Jones Industrial Average closing near record highs after the news.

But analysts reiterated calls yesterday for caution since no concrete steps have been taken to resolve the dispute.

"Markets need to separate trade rhetoric and trade actions," JP Morgan Asset Management's global market strategist Hannah Anderson told Agence France-Presse. "While heated rhetoric may contribute to the shifting investor expectations we have seen this week, there has been no fundamental change in the state of the US-China trade dispute.

"China and the US both need to clarify what their goals are in this dispute for us to be hopeful about a near-term resolution."

The better mood helped the key Straits Times Index jump 0.95 per cent or 29.65 points to end at 3,161.42 yesterday. It remains below the key support level of 3,200, which it broke in the middle of last week, but still managed to improve on last Friday's close of 3,134.39.

Gainers outnumbered losers 215 to 159 with 1.4 billion shares worth $924.9 million changing hands.

ST Engineering soared 7.3 per cent or 24 cents to $3.53 after news on Thursday night that it was acquiring General Electric's MRA Systems for US$630 million (S$862 million).

Research houses, including DBS Equity Research, CGS-CIMB and OCBC Investment Research, all issued "buy" calls on the stock yesterday morning.

"From STE's point of view, this acquisition will allow it to scale up its aerospace capabilities by moving it into the OEM (original equipment manufacturer) business of high-value nacelle components and replacement parts," wrote OCBC research analyst Low Pei Han.

City Developments Limited added 19 cents or 2.2 per cent to end at $8.82, after saying yesterday morning that it had acquired a prime freehold commercial building in London for £183 million (S$328 million).

Venture Corp responded to a query from the Singapore Exchange late on Thursday night about a sudden slide in its share price earlier that day. It said it was unaware of any previously unannounced information that could explain the unusual activity, which saw its shares drop 96 cents or 5.69 per cent to $15.90.

It rebounded yesterday, up 64 cents or 4 per cent to $16.54.

A version of this article appeared in the print edition of The Straits Times on September 15, 2018, with the headline 'Markets end tough week on a higher note'. Print Edition | Subscribe