Regional stocks advance despite Evergrande concerns

The Straits Times Index closed higher yesterday, up 21.47 points or 0.71 per cent at 3,063.20, even as worries heightened in the region over debt-roiled property giant Evergrande Group.

The gains were partly because of traders buying the dips, given recent losses in the local market on the back of expectations of the US central bank's tapering, the rising number of Delta variant cases and global macro concerns.

After a torrid start to the week, Hong Kong stabilised and finished 0.5 per cent higher. Malaysia and Australia also finished higher by 0.2 and 0.4 per cent respectively.

Worries over the debt woes engulfing Evergrande and its potential domino effect heightened with some market observers even drawing comparisons with Lehman Brothers, which collapsed during the global financial crisis in 2008.

Mainland China was on holiday for the Mid-Autumn Festival.

A statement by the chairman of the indebted firm that the developer "will walk out of our darkest moment" and deliver property projects gave some reassurance.

Mr Rob Carnell, ING's regional research head, said in a note: "In the very short term, the easiest concrete measures that are likely to be taken are more People's Bank of China liquidity injections. These, and the government's strong control over the banking system, strongly suggest that a sudden liquidity loss like we witnessed during the global financial crisis should be avoided."

At home, turnover came in at some 1.48 billion units worth $1.47 billion. Gainers outpaced losers 298 to 186.

Singapore's three largest aviation stocks saw relief gains on big news that the US will soon open travel to vaccinated travellers with a negative Covid-19 test. Singapore Airlines (SIA) rose 17 cents or 3.54 per cent to $4.97; SIA Engineering was up six cents or 2.99 per cent at $2.07, and Sats rose 14 cents or 3.6 per cent to $4.03.