Bulls And Bears

Stronger greenback gives markets a lift

Sentiment improves across Asia as fears of nuclear escalation on Korean peninsula ebb

Local stocks picked up yesterday, as markets across Asia were generally positive about a stronger American dollar.

The benchmark Straits Times Index added 7.18 points, or 0.22 per cent, to 3,235.69 points after closing flat on Monday.

CMC Markets Singapore analyst Margaret Yang forecasts a sideways market right now, with the index likely to oscillate between 3,200 points and 3,272 points.

The top counter by value traded was Singtel, which sank by three cents, or 0.8 per cent, to $3.66.

This came in the wake of an OCBC Investment Research report on Monday that forecast declining revenues for the telecommunications sector.

Singapore Press Holdings also lost four cents, or 1.5 per cent, to $2.58.

CapitaLand, on the other hand, closed up by four cents, or 1.1 per cent, at $3.74.

It recently invested about $300 million in Indonesia, the biggest economy in South-east Asia, citing sound fundamentals such as steady growth and rising domestic consumption.

Rounding out the top five counters by value traded were DBS and OCBC.

DBS rose six cents, or 0.3 per cent, to $20.49, while OCBC added a cent, or 0.9 per cent, at $11.02.

The Singapore Exchange's gentle advance was well met in the region, as fears of nuclear escalation on the Korean peninsula receded in the wake of fresh United Nations Security Council sanctions against Pyongyang on Monday afternoon.

Jefferies chief global strategist Sean Darby told Bloomberg: "What road seems to be travelled now is one of negotiation rather than provocation.

"There has been a reversal of the tactics over the last week and I think that's what the markets are seeing."

American markets also took heart - and the greenback made some gains - after Hurricane Irma's impact on the coastal state of Florida was less devastating than predicted.

In a positive sign for the yuan, China's central bank loosened capital controls enacted earlier this year, while the weaker yen boosted prospects for exporters in Japan.

Tokyo was up by 1.18 per cent, Shanghai by 0.09 per cent and Hong Kong by 0.06 per cent, while Seoul ended higher by 0.27 per cent.

A version of this article appeared in the print edition of The Straits Times on September 13, 2017, with the headline 'Stronger greenback gives markets a lift'. Print Edition | Subscribe