Bulls And Bears

STI up as sentiment rises on Wall St gains

Sembcorp Industries, ComfortDelGro and Venture Corp among top performers

Another strong finish on Wall Street on Friday gave local investors the incentive to start the week on a positive note yesterday.

It pushed the benchmark Straits Times Index (STI) up 0.77 per cent or 19.46 points to 2,552.42, with gainers outpacing losers 272 to 174 on trade of 1.4 billion shares worth $1 billion. Sembcorp Industries came out tops among the STI constituents, gaining 3.01 per cent to $1.37. Other top STI performers included ComfortDelGro, ahead 2.07 per cent, and Venture Corporation, which gained 1.92 per cent.

RHB analyst Shekhar Jaiswal said in an Oct 7 report that ComfortDelGro "should benefit from gradual improvements in public transport ridership and increase in its taxi utilisation, as the country enters Phase 3 of reopening the economy".

Parliament was told last week that details of a Phase 3 road map will be released "in the coming weeks".

The trio of banks also ended the day up. DBS Bank gained 1.66 per cent to $21.40, OCBC Bank inched up 1.05 per cent to $8.68, while UOB advanced 0.98 per cent to $19.64. UOB said in a bourse filing yesterday that its Sydney branch has priced A$500 million (S$489 million) of floating rate notes due in October 2023, which will fall under its US$15 billion global medium-term note programme.

Meanwhile, Dairy Farm International was top decliner for the day, falling 1.29 per cent to US$3.83.

Asian markets ended the day mixed. Shanghai shares rose 2.64 per cent while the Hang Seng Index tracked the mainland's gains to end up 2.20 per cent.

Mr Stephen Innes, AxiCorp's chief global markets strategist, said the rallies were "put down to expectations that President Xi Jinping's trip to Shenzhen could reveal more detailed policy plans and further liberalisation of the Chinese economy".

The benchmark Nikkei 225 index fell 0.26 per cent but Australian stocks added 0.4 per cent to hit a seven-week high and the best six-day run since early June.

Investors were cheered by talk that a Democrat clean sweep in the United States election next month will lead to a significant post-election stimulus package. US markets were closed overnight for Columbus Day, but eyes are on the likelihood of additional stimulus as the world's largest economy struggles to recover from lockdowns that threw millions of Americans out of work.

"The stimulus game is still being played out in the US right now and we don't know how big or small it will be. We are just assuming that it will be something," Mr Brad Smoling, managing director at Smoling Stockbroking, told Reuters.

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A version of this article appeared in the print edition of The Straits Times on October 13, 2020, with the headline STI up as sentiment rises on Wall St gains. Subscribe