STI advances as jitters over tensions in Korean peninsula abate

An SGX sign is pictured at Singapore Stock Exchange. PHOTO: REUTERS
An SGX sign is pictured at Singapore Stock Exchange. PHOTO: REUTERS

SINGAPORE - Local equities moved higher on Monday (Aug 14) despite starting the day on a weak note.

The benchmark Straits Times Index (STI) advanced 28.97 points, or 0.88 per cent, to 3,308.69. A total of 1.43 billion shares worth $1.17 billion changed hands across the bourse.

The gains here were in line with Wall Street's 0.07 per cent rise last Friday, while jitters over tensions in the Korean peninsula abated.

Hong Kong rose strongly by 1.36 per cent and Shanghai was up 0.9 per cent. But Tokyo lost 0.98 per cent on the back of a stronger yen, despite better-than-expected numbers for economic growth in the second quarter.

KGI Securities (Singapore) trading strategist Nicholas Teo noted the latest stand-off between North Korea and its neighbours has given funds and investors an excuse to take profits off the table.

"While geopolitical risks are ever present in this diverse world we live in, what can really fracture the market's forward march is the withdrawal of central banks' life support," he said, referring to both the United States Federal Reserve and the European Central Bank, which have been "softening the market" with their reverse quantitative easing rhetoric.

The STI's firm showing was backed by two of the three local banks: OCBC Bank rose 1.6 per cent or 18 cents to $11.38 while DBS Group Holdings added 1.2 per cent or 25 cents to $21.05.

United Overseas Bank, on the other hand, eased 0.4 per cent or 10 cents to $24.10.

The day's most heavily traded stock was mDR, which plummeted 16.7 per cent or 0.1 cent to 0.5 cents on 181.9 million shares done.