A post-Trump election victory rally is gaining steam as United States markets hit fresh record highs with the bullish sentiment lifting shares here for a second straight day.
The Dow Jones Industrial Average added another 0.35 per cent overnight to hit a fresh record high, driving several Asian markets higher, led by Sydney's 1.31 per cent gain. More modest gains were recorded by Seoul's Kospi, which added 0.23 per cent, and Kuala Lumpur, which rose 0.07 per cent.
Shanghai, however, pared 0.22 per cent. Tokyo was closed for a holiday. In Singapore, the Straits Times Index jumped 17.49 points or 0.62 per cent to 2,839.69, as 1.33 billion shares - worth some $1.22 billion - changed hands. The STI has ranged between 2,790 and 2,840 points since Mr Donald Trump won the presidential poll, leaving the market room to catch up with the global Trump rally, CMC Markets analyst Margaret Yang said. "There's a lot of sentiment buying at the moment, people betting on Trump's policies and pushing up the prices of US dollar assets. Meanwhile, the market has now fully priced in a December rate hike by the Federal Reserve - there's no more uncertainty on that front," she said. "So I think the markets may gain further, especially for the STI before hitting the key resistance at 2,900. The local shares have been placid for easily six to seven months now and really don't have a lot more downside."
Of the 19 STI component stocks that rose yesterday, Thai Beverage was the top gainer. It added three cents or 3.47 per cent to 89.5 cents on 37.6 million traded shares, recovering somewhat from the multi-day sell-off since early November.
DBS Group Holdings put on 25 cents or 1.51 per cent to $16.76, OCBC rose three cents or 0.34 per cent to $8.77, and United Overseas Bank jumped 26 cents or 1.32 per cent to $19.95. DBS and UOB are both at 2016 highs. Owing partly to the rate hike outlook, banking has been among the choice sectors that investors rotated their money into recently, but the trio's price-to-earning ratios are still at around 10.
Singapore Exchange rose six cents or 0.84 per cent to $7.21. CIMB analyst Jessalynn Chen upgraded her call from reduce to hold. "Recent market volatility on the back of a Trump win and more certainty of a Fed hike in December could sustain better trading volumes in the near to mid-term."
Only four STI stocks ended in the red yesterday. Genting Singapore was down one cent or 1.03 per cent to 96 cents with 32.6 million shares traded, as investors took profit on the gaming counter after it hit the high of 98.5 cents on Tuesday.
Outside the STI, Ezra Holdings closed 0.1 cent or 2.17 per cent higher at 4.7 cents, on 53.4 million traded shares. "Oil and gas is another sector that I think investors can look at now, as we head towards the Opec meeting," Ms Yang said, referring to a much anticipated possible production freeze by the oil cartel.