Positive economic data from China and Japan lifts regional stocks; STI up 0.9%

SINGAPORE – It was a triple header of good news for local shares on Aug 15 in the form of strong retail data from China, robust gross domestic product numbers in Japan and heightened optimism over United States interest rates.

The Straits Times Index (STI) responded by rising 0.9 per cent or 29.45 points to 3,315.73, with gainers trouncing losers 314 to 263 after one billion securities worth $1.3 billion were traded.

Regional markets were broadly in the black. Japan’s Nikkei 225 rose 0.8 per cent, Shanghai shares gained 0.9 per cent, but Hong Kong’s Hang Seng fell 0.02 per cent. Australian stocks added 0.2 per cent to hit a two-week high.

SPI Asset Management managing partner Stephen Innes said Asian indexes were likely riding a wave of new economic data from the region.

China’s retail sales rose 2.7 per cent in July, beating expectations for 2.6 per cent growth, but factory output slowed for the third month running. Meanwhile, Japan’s second-quarter gross domestic product rose by 3.1 per cent annualised, beating expectations.

All eyes are on the upcoming United States August payroll figures, Mr Innes added, noting: “While the latest US consumer price index print flashes a green light for the Fed to initiate rate cuts, possibly in September, the real debate is whether it’ll be a bold 50-basis-point dive or a more cautious 25-basis-point trim.”

On Wall Street overnight, the three key indexes made gains. The S&P 500 added 0.4 per cent, the Dow Jones Industrial Average put on 0.6 per cent and the tech-heavy Nasdaq ended slightly up.

ST Engineering was the STI’s top gainer, rising 4.4 per cent to $4.56.

The trio of local banks also rose: DBS, which went ex-dividend, gained 0.4 per cent to $34.76; OCBC was up 0.5 per cent to $14.02; and UOB climbed 1.4 per cent to $30.03. City Developments was at the bottom of the table, falling 3.1 per cent to $5.05. THE BUSINESS TIMES