STI and peers get boost from US Fed
OPTIMISM that weaker global economic growth will keep interest rates low gave the local market a much-needed boost yesterday.
The benchmark Straits Times Index rose 1 per cent, or 32.54 points, to 3,259.25 after the minutes of the last United States Federal Reserve policy meeting were released.
The Fed's hint that rates would stay low for longer than many had expected ignited Wall Street, with the Dow Jones Industrial Average soaring 1.6 per cent, while the S&P 500 climbed 1.7 per cent and the Nasdaq jumped 1.9 per cent.
The positive sentiment spilled over to parts of Asia.
Hong Kong rose 1.2 per cent and Shanghai gained 0.3 per cent, while Taiwan inched up 0.1 per cent. But the Nikkei in Tokyo shed 0.8 per cent as the yen strengthened against the greenback on the Fed meeting news, erasing early gains. Seoul was closed for a public holiday.
The minutes of the Fed's policy meeting from Sept 16 to 17 "acted like a steroid", Matthew Sherwood, head of investment markets research at Perpetual in Sydney, told Bloomberg yesterday.
They seemed to suggest that US interest rates "could remain highly accommodative for longer than initially expected if global demand remained weaker than expected", he said.
Mr Michael James, managing director of equity trading at Wedbush Securities, told AFP: "Traders' interpretation was that rates are not going to be rising that much or as quickly as (people may have feared)."
Mirach Energy, which gained 0.6 cent, or 3.6 per cent, to 17.1 cents on 69.3 million shares traded, was the most active counter here.
Global Logistic Properties (GLP) rose four cents to $2.74 after announcing on Wednesday that China Development Bank's equity investment and asset management arm has invested in GLP China. GLP said last evening it has inked pre-leasing deals with two companies in eastern China.
Sembcorp Marine rose six cents to $3.68, although Keppel Corp fell five cents to $10.24.
DMG Research reported that Sembcorp Marine had been oversold, noting that its shares have dropped 20 per cent over the past year. Keppel was still winning orders despite market concerns over oil price fluctuations, it added.
Mapletree Logistics Trust gained half a cent to $1.17. CIMB Research said in a report that despite a "tight market for good quality assets", the trust would likely continue to expand via acquisitions.