Wall St rally boosts Singapore shares as they buck regional trend; STI up 0.4%
The modest rally in New York helped spur the benchmark Straits Times Index up 0.4 per cent or 15.83 points to 3,911.92 on May 28. ST PHOTO: BRIAN TEO
SINGAPORE – Local shares ignored the downbeat mood across the region and took their lead from a resurgent Wall Street overnight.
The modest rally in New York helped spur the benchmark Straits Times Index (STI) up 0.4 per cent or 15.83 points to 3,911.92 on May 28 although gainers only just edged out losers 233 to 224 on trade of 1.2 billion securities worth $1.2 billion.
Wall Street was the catalyst. Markets there rose in reaction to the news that the Trump administration has pulled back on implementing tariffs on Europe.
The tech-heavy Nasdaq led the way with a 2.5 per cent gain, partly in anticipation of a bumper earnings report from Nvidia in coming days. The Dow Industrials added 1.8 per cent and S&P 500 advanced 2.1 per cent, both breaking four-session losing streaks.
While the STI happily took the hint, regional bourses were unimpressed, with shares ending mostly in the red. Australia's ASX 200 fell 0.1 per cent after earlier hitting a three-month high, Hong Kong's Hang Index slid 0.5 per cent and Japan's Nikkei 225 ended flat.
Mr Peter Bates, the portfolio manager for global select equity strategy at investment management company T. Rowe Price Group, said the persistent US fiscal deficit – which exceeds 6 per cent of the country's gross domestic product – could affect US equities.
'If this raises doubts about the US's creditworthiness, it could push 10-year yields above 5 per cent, pressuring equity valuations,' he added.
Nevertheless, Mr Bates remained bullish on the prospects for US stocks, as he believes the market there is more likely to attract long-term opportunities.
Meanwhile, the STI's top gainer was Thai Beverage, up 2.2 per cent to 47 cents. The drinks distributor was also the most actively traded by volume, with 48 million units worth $22.5 million don e. THE BUSINESS TIMES
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