Markets Insights

Regional markets to take cue from Wall Street rally

Workers checking rolls of sheet aluminium at a factory in Huaibei in China's eastern Anhui province. Key data releases in Asia this week include China's manufacturing Purchasing Managers' Index figures for April tomorrow. PHOTO: AGENCE FRANCE-PRESSE
Workers checking rolls of sheet aluminium at a factory in Huaibei in China's eastern Anhui province. Key data releases in Asia this week include China's manufacturing Purchasing Managers' Index figures for April tomorrow. PHOTO: AGENCE FRANCE-PRESSE

Shortened week for STI amid slew of economic data, earnings reports

It is a shortened week of trading in Singapore - with the May Day holiday on Wednesday - but there will still be a slew of economic data releases and key Straits Times Index (STI) constituents reporting their earnings.

March bank lending and monetary aggregates data are due tomorrow, and Friday will see the release of the official Purchasing Managers' Index (PMI) figures for this month.

Six STI component companies reported their earnings for the first three months of the calendar year last week.

This week will see four more STI counters post earnings, all of which will be keenly watched.

Today, DBS Group will reveal first-quarter earnings and Ascendas Reit will post fiscal 2018 results.

"DBS shares have been trading up in the days leading up to the bank's first-quarter results release on Monday," a trader observed.

Tomorrow will see real estate player CapitaLand's first-quarter results and Friday, United Overseas Bank's first-quarter results.

Last Saturday, Best World International said it had been granted an extension of a trading halt, which will be lifted before the market opens next Monday.

Trading in the shares of the skincare maker and distributor were halted at 11.25am last Wednesday after falling 9 per cent, following a report by shortseller Bonitas Research that questioned the accounting behind Best World's profits and its sales practices in China.

Market watchers say local and regional markets in Asia will start the week taking cues from last Friday's strong session on Wall Street.

The performance of the New York Stock Exchange's three main indexes came on the back of official "advance" estimates of the United States' first-quarter growth at 3.2 per cent, beating street expectations and better-than-expected corporate earnings by US-listed firms.

The S&P 500 and Nasdaq Composite Index finished with fresh records. The former ended at 2,939.88, up 0.5 per cent, eclipsing last Tuesday's all-time high by six points. Meanwhile, the latter gained 0.3 per cent to 8,146.40.

The Dow Jones Industrial Average advanced 0.3 per cent on Friday to close at 26,543.33.

Key data releases in Asia this week include China's April manufacturing PMI figures tomorrow.

The private sector's Caixin PMI, focusing more on smaller and medium-sized firms, will be out on Thursday.

FXTM research analyst Han Tan said: "Should China's manufacturing data in the week ahead show further stability in the world's second largest economy, that may help anchor growth for Asian economies that are still contending with US-China trade tensions and the overall moderation in global growth."

Other key Asian data releases include trade data from Hong Kong and Malaysia as well as consumer price index data from South Korea.

There are no monetary policy decision by central banks in the Asia-Pacific this week.

However, key monetary policy decisions will be made by the US Federal Reserve and Bank of England on Thursday.

"Investors will be trying to ascertain just how patient and data-dependent the Fed will be at the upcoming meeting, even as markets attempt to price in a pre-emptive rate cut," said FXTM's Mr Tan.

Markets in Japan will remain closed for the entire week - with the holidays around the new emperor's accession to the throne adding to the country's Golden Week festivities - and trading will resume on May 7.

A version of this article appeared in the print edition of The Straits Times on April 29, 2019, with the headline 'Regional markets to take cue from Wall Street rally'. Print Edition | Subscribe