Feb 20, 2014

    Asian bourses up ahead of US updates

    SHARE prices on the local bourse rose for a third straight day, led by a positive close on Wall Street overnight.

    The key Straits Times Index (STI) gained 18.01 points or 0.6 per cent to 3,088.79.

    Most Asian bourses closed higher, ahead of the release of United States housing data.

    The Federal Reserve was last night set to issue the minutes of its meeting for last month, at which it had decided to taper its stimulus plan by another US$10 billion (S$12.6 billion).

    Hong Kong rose 0.3 per cent, Shanghai gained 1.1 per cent and Sydney climbed 0.3 per cent. Tokyo bucked the regional trend, losing 0.5 per cent.

    The S&P 500 is eight points shy of its all-time high despite weak data out of the US, which reported on Tuesday that home-builder sentiment had unexpectedly slumped.

    Attributing the steep drop in the confidence index to bad weather, ABN Amro said the outlook for construction activity in the US remains healthy and that residential investment will remain a vital source of growth this year.

    "Home builders' mood should quickly warm up again, once the weather normalises," it said.

    Turnover in the local bourse stood at 2.08 billion shares worth $1.04 billion. Gainers outpaced losers 199 to 183, while 400 counters were unchanged.

    Olam International led the gains, rising seven cents or 4.4 per cent to $1.665.

    Commodity player Golden Agri-Resources gained two cents or 3.8 per cent to 55 cents, while Wilmar International climbed six cents or 1.8 per cent to $3.31.

    The gains in Jardine stocks lent a boost to the STI. Jardine Cycle & Carriage jumped $1.05 or nearly 3 per cent to $38.45, while Jardine Strategic Holdings rose 59 US cents or 1.8 per cent to US$32.97.

    The gains by these five counters added over seven points to the key barometer.

    Having begun the year on a sour note and fallen below 3,000 points on Feb 2 following a massive sell-off, the STI has since gained some ground.

    Phillip Capital said the weekly relative strength indicator for the index appears to be recovering from an oversold position, and there is a "good possibility" of a short-term bounce this week before it resumes on a path of weakness.

    In the three days of trading so far this week, the index has notched up 50 points or 1.6 per cent, buoyed by gains on Wall Street as investors reacted to positive corporate results and mergers-and-acquisitions activity there.