Bulls And Bears

Singapore stocks rise on upbeat US news

Hopes raised over US-China trade talks, Fed chief's dovish rate hike comments

There were no Monday blues for local investors yesterday, with stocks starting the week in sprightly fashion, thanks to upbeat US wage data and dovish comments from the Federal Reserve over the weekend.

There was also optimism over trade talks between United States and Chinese officials, with hopes of a deal being struck amid the 90-day tariff truce.

Mr Stephen Innes, head of Asia-Pacific trading at Oanda, said risk sentiment is now on "more stable footing than when we opened 2019", thanks to a confluence of "market-friendly developments".

He also cited Federal Reserve chairman Jerome Powell's hints that the US central bank will pause interest rate increases until at least mid-year.

The buoyant mood sent the Straits Times Index (STI) up 1.42 per cent or 43.57 points to 3,102.8, with gainers outpacing losers 276 to 136 on trade of 1.39 billion shares worth $984.1 million.

Stocks across most sectors made gains, underpinned by financials and industrials. United Overseas Bank charged ahead by 2.34 per cent to $24.95. DBS put on almost 2 per cent to $23.75 and OCBC Bank added 1.79 per cent to $11.37.

An outlier was Great Eastern, down 0.89 per cent to $24.51. The stock has slid since the firm said last month that it was acquiring PT QBE General Insurance Indonesia for US$28 million (S$38 million).

The transaction is expected to be completed in the first half of the year, subject to regulatory approval.

Industrial stocks showed their heft too. Sembcorp Industries traded 2.72 per cent higher at $2.64 while Keppel Corp rose 2.52 per cent to $6.09. ST Engineering closed at $3.51, up 1.15 per cent.

But technology stocks may be the ones to watch, as many of the factors that could affect prices - from intellectual property issues to tariffs - are tied to the US-China trade talks, said IG analyst Pan Jingyi.

Most tech and semiconductor shares rose ahead of the trade talks.

Hi-P International shot up 12.21 per cent to 96.5 cents while AEM Holdings advanced 5.39 per cent to 88 cents. But the standout was Chuan Hup Holdings unit PCI, which surged 15 per cent to $1.30.

Platinum Equity Advisors has offered to acquire all of PCI's shares via a scheme of arrangement. The American private equity firm is offering $1.33 in cash for each share.

Asian markets also gained on improved sentiment. Japan's Nikkei jumped 2.44 per cent, and Australia's ASX 200 rose 1.14 per cent.

A version of this article appeared in the print edition of The Straits Times on January 08, 2019, with the headline 'Singapore stocks rise on upbeat US news'. Print Edition | Subscribe