Bulls And Bears

US economic news fails to lift ST Index

Local shares end flat amid some weaker corporate results here, lacklustre China data

Traders banked on better economic news from the United States later in the day to give local stocks a small lift yesterday despite some weaker corporate results here and lacklustre data in China.

The optimism left the benchmark Straits Times Index (STI) up 1.81 points at 3,382.31 but gains in earlier sessions were wiped out by profit-taking, leaving the STI down about four points for the week.

Turnover was just two billion shares worth $900 million, with gainers beating losers 211 to 207.

Ascendas Real Estate Investment Trust (Ascendas Reit) and Thai Beverage chalked up a combined loss of almost three index points. Ascendas Reit lost seven cents to $2.68, while Thai Beverage, among the day's most heavily traded, fell one cent to 96 cents on a volume of 23 million.

The CapitaLand group of companies helped lift the STI. CapitaLand, CapitaLand Commercial Trust (CCT) and CapitaLand Mall Trust (CMT) added a combined over two points to the index.

CapitaLand closed up two cents to $3.69, CMT added two cents to $2.03 while CCT, among the most active counters, closed 4.5 cents up at $1.795 on a volume of 22 million.

CCT completed the $2.09 billion acquisition of Asia Square Tower 2 from BlackRock Asia Property Fund III LP on Wednesday.

Index heavyweight Singtel gained two cents to $3.77. Nomura had said in a recent report that Singtel was its favoured pick in the telco space.

Across the region, indices were mixed, with Malaysian and New Zealand stocks ending lower, although Hong Kong's Hang Seng ended firmer as China slowdown worries were offset by the upbeat mood on Wall Street.

Australian shares ended near their highest level in 21/2 years, led by broad-based gains driven by materials and financials stocks. Japanese markets were closed for a public holiday.

President Donald Trump's pick of Mr Jerome Powell as the new United States Federal Reserve chair to replace Dr Janet Yellen next February was within expectations. It explains why the markets did not quite react to his nomination. CMC Markets Singapore analyst Margaret Yang said: "The appointment of Powell is likely to bring more certainty and consistency in terms of the Fed's monetary policy next year. Market now anticipates another 25 basis-point hike in December and three more hikes in 2018."

Separately, the US tax plan that calls for deep cuts for corporations also failed to energise the markets.

IG analyst Jingyi Pan noted: "While the tax overhaul momentum had gained pace lately with the passing of the budget through the Senate and House of Representatives, the tumultuous part arrives as the debate over the tax overhaul details is expected to commence."

A version of this article appeared in the print edition of The Straits Times on November 04, 2017, with the headline 'US economic news fails to lift ST Index'. Subscribe