Singapore shares drifted higher on fund buying and improved sentiment yesterday after Japan announced it would unleash a bigger-than-expected stimulus package to reflate the economy.
The more positive mood lifted the Straits Times Index 0.27 per cent or 8.05 points to 2,941.49, led by Jardine Cycle & Carriage, which gained 3.9 per cent or $1.43 to $37.88. It releases second-quarter earnings tomorrow .
As well as news of Japan's 28 trillion yen (S$360 billion) economic stimulus package - well ahead of estimates of 20 trillion yen - investors were buoyed by talk of more cash coming into the local market.
"Singapore is a beneficiary of fund flow that is slowly coming back to this region because of fears over the European Union after Brexit. But whether these flows will be sustained remains to be seen," Mr Nicholas Teo, a trading strategist with KGI Fraser Securities, said.
Property counter CapitaLand rose 0.9 per cent or three cents to $3.19, ahead of the United States Federal Open Market Committee meeting outcome this morning.
"Today will be very critical because five big blue-chip constituents will be reporting their earnings," CMC Markets Singapore analyst Margaret Yang Yan said.
UOB, OCBC, HongKong Land and Sembcorp Marine announce second-quarter earnings today while Singapore Airlines will announce first-quarter numbers. "STI's performance will be affected by the two banks' earnings. Analysts are worrying about their net interest margins, as well as non-performing loans because of the consolidation in oil prices," Ms Yang said.
DBS gained 0.4 per cent or six cents to $16.26 yesterday; UOB rose 0.4 per cent or eight cents to $18.94; and OCBC climbed 0.1 per cent or one cent to $8.85.
Singapore Airlines dipped 0.7 per cent or eight cents to $11.12, on expectations that its earnings may be hit by the "seasonality effect, or the off-peak travel period between March and June", Ms Yang said.
SembMarine was flat at $1.46, with analysts expecting weak oil prices to take a toll on the oil rigbuilder's earnings per share.
Penny play CNMC Goldmine dipped 2 per cent or one cent to 48.5 cents, with 35.5 million shares traded, Noble Group gained 2.4 per cent or 0.4 cent to 16.9 cents, with 33.2 million shares traded, and Golden Agri-Resources rose 2.7 per cent or one cent to 37.5 cents.
Sheng Siong climbed 2.6 per cent or 2.5 cents to 98.5 cents following RHB Securities' decision to maintain a buy call, after the supermarket operator's same-store sales growth turned positive in the second quarter following two quarters of negative growth. It said: "Operating margins continue to improve. As the weakness in the local economy persists, we believe there will be more opportunities for the company to shore up its store count at affordable rental rates."