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US-China truce lifts market sentiment

This article is more than 12 months old

STI up 73.01 points; HK and Shanghai markets recorded the biggest gains, both closing 2.6% higher

Positive market sentiment following negotiations over the weekend between the US and Chinese leaders as they struck a deal to hold off their tariff row for 90 days drove Singapore shares higher yesterday.

The outcome of the heavily anticipated meeting between Mr Donald Trump and Mr Xi Jinping could signal a new phase in the trade relationship between the two largest economies, which have hogged the spotlight for much of the year.

However, if there is no deal in place by the end of the negotiation period, the US will raise tariffs on US$200 billion (S$270 billion) worth of Chinese imports to 25 per cent.

Buoyed by the development, key Asian indices opened on a positive note with the Hang Seng, Shanghai Composite Index, Nikkei, ASX 200, Kospi and Kuala Lumpur Composite all closing higher yesterday.

The Hong Kong and Shanghai markets recorded the biggest gains, both closing 2.6 per cent higher.

Meanwhile, Japan's Nikkei surged to a six-week high, closing up 1 per cent.

In Singapore, equities fared similarly well, with the Straits Times Index (STI) up 73.01 points or 2.3 per cent to close at 3,190.62. All but two of the STI's 30 constituents ended the day in the black.

Turnover on the bourse stood at roughly 1.77 billion shares worth $1.35 billion, which worked out to an average unit price of $0.76 per share. Advancers outnumbered decliners, 317 to 140.

On a turnover of 109.7 million shares, liftboat-focused Ezion Holdings was the bourse's most actively traded stock, closing $0.004 or 6.6 per cent higher at $0.065.

Electronics manufacturing services provider Venture Corporation was the STI's biggest gainer on the day in percentage terms, up $1.20 or 8.2 per cent to close at $16.12, a reprieve for investors as a result of easing pressures on global supply chains that hit chipmakers and tech stocks heavier than most.

In dollar terms, Jardine Cycle & Carriage was the index's biggest gainer, closing $0.85 or 2.4 per cent up at $36.05.

Casino operator Genting Singapore was also among the big gainers on the day, closing $0.07 or 7.2 per cent higher at $1.04. With a turnover of 71.5 million shares, it was also the index's most heavily traded stock yesterday.

Singapore's offshore and marine sector was a leading gainer on the benchmark index, with Sembcorp Marine advancing $0.13 or 8.1 per cent to close at $1.73 and Keppel Corporation adding $0.30 or 5 per cent to close at $6.36.

CMC Market's Margaret Yang told BT: "Crude oil is riding the tailwind of potential Opec output cut, improved US-China trade relationship and a boost in general risk appetite, which led to a 5 per cent rebound in Brent oil prices.

"Investors are probably eyeing a potential turnaround of crude oil prices and trying to 'buy on the dips'."

Technology, financials, shipbuilding and consumer discretionary stocks were also among the best performers on the local bourse due to "broad improvement in risk sentiment and 'fear of losing out' effect", Ms Yang added.

Among financials, DBS Bank closed $0.73 or 3 per cent up at $25.11; OCBC Bank shares gained $0.34 or 3 per cent higher at $11.60; and United Overseas Bank jumped $0.83 or 3.3 per cent to $25.98.

Shipbuilder Yangzijiang's shares closed $0.06 or 4.8 per cent higher at $1.30.

Among property stocks, CapitaLand closed $0.10 or 3.2 per cent up at $3.22.

For full listings of SGX prices, go to http://btd.sg/BTmkts

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