Bulls And Bears

STI rises on double dose of good news

Upbeat China data, Wall Street's strong showing boost investor sentiment

News that profits at China's industrial firms grew for the fourth straight month in August, coupled with Wall Street's positive finish last Friday, put a spring in the step of local investors yesterday.

The optimism bolstered the Straits Times Index (STI) for the second straight session, closing 10.73 points, or 0.43 per cent, up at 2,483.01. Losers pipped gainers 197 to 195 on trade of 915.23 million shares worth $867.96 million.

Mr Stephen Innes, chief global market strategist at AxiCorp, said "it will continue to set a more constructive tone to the start of the week", but added that the strength in Asian markets could be tested as more banks are ruling out fiscal stimulus in the United States.

"With the market running on less monetary and fiscal oxygen these days, it would not take much to turn the tide."

The top performer on the STI was the Singapore Exchange, thanks to news that more people are getting into the share market.

Monthly numbers of Central Depository account openings have been steadily increasing since February compared with the same period last year. The stock added 2.22 per cent to $9.20.

Top loser Jardine Matheson fell 1.41 per cent to US$39.93 after it announced a repurchase of 146,300 shares at between US$40.17 and US$40.2822 each.

The most active counter on the bourse was Jiutian Chemical, a Chinese company that produces dimethylformamide, which is said to be enjoying strong growth, driven by the increasing number of industrial applications and high demand from pharmaceutical firms. The shares added 3.92 per cent to 5.3 cents on a volume of 70.4 million shares traded.

Regional markets mostly rose.

The Hang Seng Index rose 1.04 per cent, with market heavyweight HSBC boosted by news that its biggest stakeholder had increased its investment in the bank.

Tokyo's Nikkei 225 index gained 1.32 per cent, while Malaysia's FTSE Bursa Malaysia Kuala Lumpur Composite Index ended 0.17 per cent up.

South Korea's benchmark Kospi closed up 1.29 per cent, its sharpest daily rise since Sept 14.

"Easing of domestic resurgence in Covid-19... and optimism on China's industrial profits data lifted recovery hopes," said Daishin Securities analyst Lee Kyoung-min.

South Korea's coronavirus cases are at the lowest in more than a month since a new wave of outbreaks emerged from a church and a large political rally last month.

• Additional reporting by Reuters

A version of this article appeared in the print edition of The Straits Times on September 29, 2020, with the headline 'STI rises on double dose of good news'. Print Edition | Subscribe