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STI rises on back of strong US earnings

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STI gains 0.27 per cent to finish at 3,362, but analysts say current bull market may not last

The Straits Times Index (STI) reversed losses yesterday, rising 0.27 per cent or 8.96 points to finish at 3,362.43.

After lunch, it had looked like the swathe of strong US corporate earnings was not enough to stir the market here.

But the bourse recovered in its final hour of trading with 1.17 billion shares worth $1.08 billion changing hands for the day. Gainers outnumbered losers 204 to 168.

Mr Hussein Sayed, chief market strategist at FXTM, suggested that the current bull market may not last long, over potential reasons like China reducing stimulus and the Fed changing course.

"I'm not saying that markets may not go higher from current levels. However, in my opinion, this is not the most loved bull run," he said.

Among advancers, China Everbright Water shot up 25.64 per cent or 10 cents to 49 cents on a turnover of 36.2 million shares.

The company launched its public offer on the Hong Kong exchange yesterday for about 104 million shares at HK$2.99 (52 Singapore cents) to HK$4.35 per share.

ST Engineering was another gainer, adding 3.45 per cent or 13 cents to $3.90.

It announced that its US shipbuilding business, VT Halter Marine, won a US$745.9 million (S$1 billion) contract from the US Navy for the design and construction of a heavy polar icebreaker for the US Coast Guard.

The contract includes options for two additional ships, which - if exercised - would bring its total value to US$1.94 billion.

This comes after ST Engineering said on Monday that its aerospace and electronics sectors secured new contracts worth about a total of $2.1 billion in the first quarter of the year.

Mainboard-listed United Industrial Corp (UIC) also gained, rising 2.89 per cent or nine cents to $3.20.

Flush from its coup in consolidating ownership of Marina Square, UIC had turned in first-quarter earnings growth on Tuesday.

Net profit for the three months to March 31 swelled by 35 per cent year-on-year to $81.1 million, with revenue rising 12 per cent to $185.3 million on growth in its property and information technology business segments.

This is not to say that all was bright and sunny on the bourse.

Best World International shares slumped after activist shortseller Bonitas Research published a report questioning the company's accounting and sales.

Trading was halted after the counter dropped as much as 11 per cent, prompting a query from the Singapore Exchange.

Another hot stock was Yangzijiang Shipbuilding, which saw Credit Suisse downgrade its recommendation to "underperform" from "neutral" with a target price of $1.30.

Analysts' average target price is $1.58, according to Bloomberg data.

The stock dipped 2.52 per cent or four cents to $1.55 on a turnover of 51.4 million shares.

Datapulse Technology lost ground despite announcing that it is acquiring a 15 per cent stake in the Holiday Inn Express Seoul Euljiro hotel in South Korea for 8.6 billion won (S$10.2 million), in a joint venture deal with Bizcentre Capital.

The company's recent troubles may have left a lingering bad taste in some investors' mouths.

The stock price fell by 3.85 per cent or one cent to close at 25 cents on volume of 535,000 shares.

Across the region, Asian markets were once more a mixed bag, in spite of the frenzy on Wall Street.

Japan's Nikkei 225 declined 0.27 per cent on the day to 22,200, while South Korea's Kospi fell 0.88 per cent to finish its trading day at 2,201.03.

But Australia's ASX added 0.99 per cent to 6,382.10, its highest close in more than a decade.

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