STI continues upward trajectory after Trump victory, ends day up 2%

SINGAPORE – The “Trump trade” that ignited Wall Street overnight went on to turbo-charge local shares on Nov 7.

The US election result helped lift the Straits Times Index (STI) 2 per cent or 70.5 points to 3,673.49 but losers still outnumbered gainers 306 to 278 on trade of 1.7 billion securities worth $2.4 billion.

Among the local lenders, DBS Bank rocketed 6.5 per cent to an all-time high of $41.70, largely on the back of strong third-quarter results. OCBC Bank was the next top gainer, up 3.8 per cent to $15.88, while UOB ended up a more modest 1.9 per cent at $33.30.

The top STI loser was CapitaLand Investment, which fell 3.8 per cent to $2.80 amid a decline of property and real estate investment trusts during the session.

Wall Street certainly set the pace after Donald Trump’s resounding victory, with shares surging to record highs. The Dow Jones Industrial Average shot up 3.6 per cent, the S&P 500 added 2.5 per cent, and the Nasdaq gained 3 per cent.

Those bumper numbers could only generate mixed results across major regional indexes.

The Nikkei 225 in Tokyo was down 0.3 per cent, while the Kospi in Seoul was flat. Hong Kong’s Hang Seng added 2 per cent, the ASX 200 in Australia put on 0.3 per cent after a rollercoaster day, but Malaysian shares closed down 0.7 per cent.

Given the STI’s significant exposure to banking stocks, the financial sector will be a key driver for the performance of the index, said IG market strategist Yeap Jun Rong.

He said gradual interest rate cuts should translate to a slower taper in the banks’ net interest margins, and the recovery momentum in their non-interest income will likely fuel their performance.

“A more than 5 per cent dividend yield remains attractive as well, offering both a growth and income story for investors,” Mr Yeap said. THE BUSINESS TIMES