Japan surge pulls regional bourses up
INVESTORS here rode a wave of Tokyo-led optimism that swept across regional markets yesterday, as Singapore shares posted gains for the second straight day.
The benchmark Straits Times Index (STI) jumped 42.86 points, or 1.49 per cent, to 2,928.18.
The rally in Asian equities was led by Japan, which surged 7.71 per cent - its biggest hike since the aftermath of the Lehman Brothers bankruptcy in 2008.
Shanghai added 2.29 per cent amid expectations that Beijing will move to shore up the world's second-largest economy, while Hong Kong chalked up its biggest one-day gain since December 2011 with a 4.1 per cent jump.
China's finance ministry yesterday unveiled a slew of initiatives that lifted market sentiment, including plans to ramp up infrastructure projects and expansionary fiscal measures, such as income-tax cuts.
Overnight, Wall Street leapt 2.42 per cent as traders in the United States were greeted by the first gains in mainland China shares in five trading days after a long weekend.
"China seems to be the big driver at the moment," Chris Weston, IG chief markets strategist in Melbourne, told Bloomberg. "As long as China is stable and equity markets there aren't in freefall, markets will generally go higher."
But he added: "We won't rule out more volatility ahead of the US Fed meeting next week."
At home, the three local banks continued to forge ahead, with United Overseas Bank rising 50 cents or 2.59 per cent to $19.80.
OCBC Bank gained 15 cents or 1.67 per cent to $9.14, while DBS Group Holdings added 26 cents or 1.47 per cent to $17.96.
Local rigbuilders Sembcorp Marine and Keppel Corporation finished stronger as well, in line with a pick-up in oil prices. SembMarine jumped eight cents or 3.4 per cent to $2.43, while KepCorp climbed 19 cents or 2.79 per cent to $7.01.
Losses were led by Jardine Matheson Holdings, which shed 92 US cents or 1.88 per cent to US$48, and Olam International, down half a cent or 0.26 per cent to $1.95. Both counters - along with Jardine Strategic Holdings - are set to exit the STI come Sept 21, following new liquidity rules.
Outside of the blue chips, rubber producer Halcyon Agri Corporation soared six cents or 9.92 per cent to 66.5 cents.
The firm, in a response to a query from the Singapore Exchange about its share price movement yesterday, said it is in "confidential discussions with certain parties regarding a potential strategic transaction".
Across the market, 1.33 billion shares worth $1.24 billion were traded.