Bulls And Bears

Regional bourses rise as Wall Street shines

Hopes of further stimulus by China's central bank also ease fears over virus

Regional shares recovered from Monday's slide due in part to a strong showing on Wall Street, where the main benchmarks hit record highs.

Singapore's Straits Times Index (STI) clawed back most of the previous session's losses to close 12.42 points or 0.4 per cent up at 3,175.57.

Elsewhere, Australia, China, Hong Kong, Malaysia, South Korea and Taiwan all notched up gains. Japan was closed.

Shanghai added 0.4 per cent, the benchmark's sixth straight session ending in positive territory.

AxiCorp chief market strategist Stephen Innes noted that the regional market's performance was also down to expectations of further injection of stimulus by the People's Bank of China (PBOC) to counter the economic effects of the coronavirus outbreak. He said: "Given the ongoing easing measures, the market thinks the PBOC will conduct a sizeable new batch of medium-term lending facility cuts later this week or early next week."

Investors are also taking heart from the fall in the number of new cases of the virus in China. That said, Mr Vishnu Varathan, Mizuho Bank's head of economics and strategy for the Asia and Oceania treasury, warned investors not to be too optimistic, adding that dismissing the risk of secondary infections would be complacent.

Trading volume here was 1.5 billion shares worth $1.12 billion, with gainers beating losers 237 to 166.

Most medical plays, which have been red hot in recent weeks, closed lower, with the notable exception of Clearbridge Health.

The integrated healthcare firm was up 3.8 per cent to 16.6 cents with 71.3 million shares traded, making it one of the most active counters on the bourse.

The banks were mixed. UOB added 0.8 per cent to $25.78, DBS dipped 0.1 per cent to $25.09, and OCBC rose 0.5 per cent to $10.77.

STI counters that recently saw sell-offs reversed course as investors bought on dips. Singapore Airlines rose 0.2 per cent to $8.53, while Yangzijiang Shipbuilding added 1.6 per cent to 98.5 cents.

SIA Engineering fell 0.8 per cent to $2.57 after OCBC Investment Research downgraded the aircraft services provider to "sell" as the virus spread weighs on travel demand.

NetLink NBN Trust was unchanged at $1 after posting a 9.6 per cent rise in third-quarter earnings to $21.5 million. UOB Kay Hian expects its outperformance of the STI this year to continue "as investors seek shelter in high dividend-yielding stocks amid external volatility".

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A version of this article appeared in the print edition of The Straits Times on February 12, 2020, with the headline Regional bourses rise as Wall Street shines. Subscribe