Asian markets build on earlier gains, Latest Business News - The New Paper

Asian markets build on earlier gains

This article is more than 12 months old

But volatility remains high with US interest rate worries and trade tensions festering against backdrop of weak global growth

Asian equities built on Wednesday's gains as global markets recover from October, a month defined by the worst performance for markets in more than six years.

But Mr Hussein Sayed, chief market strategist at FXTM, pointed out: "Robust corporate earnings and bargain hunting for undervalued stocks led the pullback, but the fundamental story hasn't changed a lot yet."

Worries over US interest rates continued to grow as trade tensions festered against the backdrop of weak global economic growth.

This, Mr Sayed said, "will create a tricky environment for investors on whether to focus on the macro outlook or valuations which are becoming much more reasonable than a year ago".

He added: "What investors may be certain about is for volatility to remain elevated, especially with the US midterm elections just around the corner."

IG market analyst Pan Jingyi noted: "The same woes that plagued markets in October persist into the new month, and the latest rebound had likely been part of a wider volatile trend that would extend into November as well, lacking conviction for a convincing recovery."

In Singapore, equities built on gains made on Wednesday, with the Straits Times Index up 42.05 points or 1.4 per cent to close at 3,060.85.

Turnover on the bourse stood at 2.33 billion shares worth $1.23 billion. Advancers outnumbered decliners 226 to 175.

On a turnover of 39.1 million shares, Genting Singapore was the bourse's most actively traded stock, rising one cent or 1.1 per cent to close at 89 cents.

Jardine Cycle & Carriage was the STI's biggest gainer on the day, closing $1.60 or 5.3 per cent higher at $31.87.

Among financials, shares in OCBC Bank, which yesterday reported a 12 per cent increase in net profit to $1.25 billion for its third quarter, closed 41 cents or 3.8 per cent up at $11.15.

DBS Bank shares closed 49 cents or 2.1 per cent higher at $23.95 and United Overseas Bank shares closed 28 cents or 1.1 per cent up at $24.66.

Among real estate, City Developments closed 29 cents or 3.7 per cent up at $8.20.

Telcos also fared well with Singtel shares two cents or 0.6 per cent up at $3.18 and StarHub shares were 10 cents or 5.3 per cent up at $1.98.

CMC market analyst Margaret Yang said: "OCBC Bank's upbeat Q3 earnings gave the Singapore market a confidence boost. Jardine Cycle & Carriage, City Developments, StarHub and DBS were also doing the heavy lifting in the benchmark index ahead of their results next week."

Key Asian indices were largely positive, with the Hang Seng, ASX 200, Shanghai Composite and Kuala Lumpur composite posting gains.

Ms Pan said: "Asia markets also received the intraday boost from the better than expected Caixin manufacturing Purchasing Managers' Index readings where the key new export orders also improved, relieving some worries that the impact from the trade tensions had worsened."

Bucking the trend was Tokyo's Nikkei, which closed 1.1 per cent lower to end at 21,687.65. The index was weighed down by the communications sector as telcos revealed that they would slash fees.

Meanwhile, South Korea's Kospi ended a tad lower, snapping two sessions of gains.

"Going forward, sectorial rotation may continue to favour defensive over growth companies as market participants are probably more realistic about earnings growth rate amid rising borrowing costs and the unclear trade outlook," Ms Yang said.

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