Singapore shares rally on trade optimism with STI up more than 1%

The Singapore Exchange Centre in Shenton Way. PHOTO: ST FILE

SINGAPORE - Singapore shares surged on Tuesday morning (Oct 1) leading the rest of Asia tracking Wall Street gains overnight, as investors looked ahead to the resumption of talks between Beijing and Washington.

This comes after White House trade adviser Peter Navarro dismissed reports that the Trump administration was considering delisting Chinese companies from US stock exchanges as "fake news".

Overnight on Monday, Wall Street ended the quarter on a positive note with the broad-based S&P 500 rising 0.5 per cent, paced by Apple which climbed 2.4 per cent. The tech-rich Nasdaq Composite Index also jumped 0.75 per cent, while the Dow finished 0.36 per cent higher.

On the Singapore bourse, the benchmark Straits Times Index rose more than 1 per cent, or 31.72 points to 3,151.71 as at 10.40am on Tuesday. Advancers outnumbered decliners 149 to 69, on a churn of about 202.3 million shares worth $220.6 million.

Among the most heavily traded by volume, Yangzijiang Shipbuilding advanced 4.2 per cent, or four Singapore cents to $1, with about 14 million shares traded, while Golden Agri-Resources added 2.2 per cent, or 0.5 cent to 23 cents, with 11.3 million shares traded.

Across the board, all the STI constituents were in the green by the morning trade. Buttressing the index were the financials - DBS gained 1.3 per cent, or 32 Singapore cents to $25.32, OCBC Bank rose 1.2 per cent, or 13 cents to $10.99, and United Overseas Bank (UOB) added 1.1 per cent, or 27 cents to $25.93.

In a research note on Tuesday morning, DBS equity analyst Yeo Kee Yan highlighted Singapore banks as a trending sector, citing "resilient loan growth". "Industry loans continued to grow 1 per cent m-o-m (month-on-month), or 5.1 per cent y-o-y (year-on-year) on strong business loan growth," Mr Yeo said, adding that UOB remains as the top pick of the industry amongst the DBS analysts.

Other active index stocks included Venture which advanced 3.9 per cent, or 59 Singapore cents to $15.90, as well as Sembcorp Industries and Singapore Press Holdings, which both gained 1.9 per cent each, or four cents to $2.12.

Elsewhere, Chinese mainland exchanges were closed on Tuesday for the 70th anniversary of the founding of the People's Republic of China, though the quarter-end feel-good factor spilled over into regional exchanges in the morning trade.

IG market strategist Pan Jingyi noted: "Following the better-than-expected manufacturing PMIs (Purchasing Managers' Index) out of China on Monday, and the moderate improvement in sentiment overnight, Asia markets may find some support going into Tuesday. This may help to curb the downtrend we have seen for the MSCI Asia ex-Japan index thus far into end-September."

Overall, Asian equities kicked off Q4 on an upbeat note, after US indices mostly posted quarterly gains. For the third quarter, the S&P 500 added 1.2 per cent and the Dow finished modestly higher, while the Nasdaq edged 0.1 per cent lower for the three-month period - its first quarterly decline of the year.

Han Tan, market analyst at FXTM said: "Despite the risk-on mode on display, market sentiment remains fragile going into the final quarter of the year, as the risks to the global economy remains tilted to the downside.

"Investors are eagerly looking ahead to next week's US-China trade talks, which should set the tone for global trade tensions for the rest of 2019, whereby further displays of goodwill from either side could encourage investors to end the year on a risk-on note. Still, any show of market exuberance will be tampered by the realisation that the geopolitical landscape could deteriorate at any time, as has been demonstrated on multiple occasions this year," Mr Tan added.

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