Bulls And Bears

Wall Street's positive showing gives STI a lift

Optimism over a dovish US Fed also helps rally markets around the region

With the political drivers of last week taking a back seat, most eyes will be trained on the outcome of the United States Federal Reserve's policy meeting tomorrow.

Yesterday, the Singapore market mostly took its cue from Wall Street's positive showing last Friday as the Straits Times Index (STI) added 12.78 points, or 0.4 per cent, to close at 3,212.96.

IG market strategist Pan Jingyi noted that last week's miss in US inflation and industrial production figures "had only reinforced the expectation for a dovish Fed". Markets in Australia, Japan, South Korea, China, Hong Kong and Malaysia all closed yesterday's session higher.

Of the lot, the Shanghai Composite Index hit a nearly 6 1/2-month high, while the Hang Seng registered a nine-month high. Both markets were boosted by news that the Chinese government will provide a lift to its slowing economy through fiscal stimulus.

Trading on the Singapore bourse clocked in at 814.84 million securities worth $774.89 million. Advancers and decliners were even at 198 each.

Of the STI's 30 constituents, 23 ended the day in the black. Among them, ThaiBev was the blue-chip index's most traded, ending the session one cent, or 1.2 per cent, up at 82.5 cents, with 21.4 million shares changing hands.

DBS Group Holdings' counter saw $53.38 million traded - 6.9 per cent of the bourse's value of securities traded - across 2.11 million shares. The bank's shares added 10 cents or 0.4 per cent to close at $25.24.

The other local banks - OCBC Bank (up eight cents, or 0.7 per cent, to $11.21) and United Overseas Bank (up 14 cents, or 0.6 per cent, to $25.38) - outperformed the STI.

The STI's sole tech counter, Venture Corp, rode the coat-tails of US tech stock performance last Friday, closing 21 cents, or 1.2 per cent, up at $18.

Sentiment around the Fed's dovishness meant that real estate fared well yesterday. Among the blue-chip index's top performers were UOL, which closed 13 cents, or 2 per cent, higher at $6.58, and City Developments, which added 13 cents, or 1.5 per cent, to $9.01.

But IG's Ms Pan did not find the property counters' performance surprising, "given their sensitivity towards interest rates".

With market volatility likely to persist and with Fed rate hikes - at least in the near term - appearing likely to be on hold, Singapore Reits continued to garner interest from investors.

A version of this article appeared in the print edition of The Straits Times on March 19, 2019, with the headline 'Wall Street's positive showing gives STI a lift '. Print Edition | Subscribe