Region rebounds after sell-offs on Trump news

Calm returned to markets yesterday after the knee-jerk sell-offs that roiled bourses across the world following news that United States President Donald Trump had tested positive for the coronavirus.

Most regional indexes rebounded, including the Straits Times Index (STI) with a 21.12-point or 0.85 per cent rise to 2,517.23. Gainers outnumbered losers 225 to 182 with 1.09 billion shares worth $992 million changing hands.

The STI's best performer was Jardine Matheson Holdings, which rose 5.34 per cent to US$42.04.

By contrast, Frasers Centrepoint Trust was one of the worst-performing securities. The real estate investment trust (Reit) traded ex-rights and ex-dividend yesterday, shedding 3.32 per cent to end at $2.33.

The Reit recently closed a private placement at about 2.8 times subscribed and priced at the bottom end of the range, with the upsize option not exercised.

The heightened possibility of a highly speculated merger with peer Keppel's unit kept trading interest high in Sembcorp Marine. The stock was again one of the most active counters but it closed flat at 14.8 cents with 40.39 million shares traded.

Observers said markets are largely pricing in a win by Democrat Joe Biden over Mr Trump next month and a clean sweep for the Democrats in House and Senate polls, despite expectations of higher taxes and regulations.

But Axi strategist Stephen Innes warned of more bumps ahead: "With just weeks ahead of the US election, the only certainty is the uncertainty of what lies ahead.

"In the near term, the President's health situation may increase the likelihood of a contested result and all the adverse knock-on effects in times of uncertainty and heightened volatility after polling day."

The region's top performer was Australia's S&P/ASX 200, which closed up 2.59 per cent - its biggest daily jump since July - on the back of expectations of wide-ranging tax cuts in the nation's budget tonight.

Hong Kong, Seoul and Tokyo shares posted gains of over 1 per cent as investors responded to Mr Trump showing signs of recovery and also held out hopes for a new US stimulus package. Hong Kong's Hang Seng closed 1.32 per cent higher; South Korea's Kospi added 1.29 per cent and the Nikkei 225 in Tokyo advanced 1.23 per cent.

Mainland China is in the midst of its week-long Golden Week holiday, which ends on Thursday.