Feb 07, 2014

    STI rebounds but misses sweet spot

    THE local bourse rebounded yesterday, snapping five straight days of losses.

    But, alas, it did not have enough steam to allow the Straits Times Index (STI) to bounce back above the 3,000-point level.

    The benchmark index, which closed below the psychological mark for the first time in 14 months on Monday, jumped 28.18 points or nearly 1 per cent to 2,988.27.

    The STI had lost more than 3 per cent in the previous five trading days, so bargain hunters no doubt played some role in yesterday's gains.

    There was also some good news on the domestic economy mid-week, with Singapore's manufacturing activity clicking higher last month, beating estimates.

    Most other Asian bourses closed higher, too, despite Wall Street's choppy outing overnight.

    Hong Kong's Hang Seng rose 0.7 per cent, South Korea's Kospi added 0.9 per cent while Australia's ASX 200 gained 1.2 per cent. Japan's Nikkei 225 bucked the trend, falling 0.2 per cent.

    Investors anxiously await the release of crucial non-farm payrolls data in the United States today, for some clarity on the direction of the world's largest economy.

    The markets in mainland China will reopen today after being shut for the Chinese New Year holiday.

    Investor concerns persist, including on the US Federal Reserve's tapering of its stimulus programme, growth worries over China and volatility in emerging markets. These worries have led to intense foreign selling pressure in the region.

    Maybank Kim Eng Research expects regional investors to step up their defensive stance and keep more cash for now.

    The research house said that, from a technical stance, chart indicators for the STI are mainly negative and investors have been selling since the STI reached its high of around 3,500 points in May last year.

    Yesterday, the index reached an intraday high of 2,994.48 in the last hour of trading.

    Gains were led by Thai Beverage, which rose 2.5 cents or 5 per cent to 53 cents.

    Noble Group gained three cents or 3.2 per cent to 96 cents while Hutchison Port Holdings Trust rose two US cents or 3.1 per cent to 67 US cents (85 Singapore cents).

    Blumont Group closed unchanged at 7.1 cents. The resource firm said earlier that the proposed acquisition of 135 million Blumont shares by chairman-designate Alexander Molyneux had been deferred.

    Del Monte Pacific jumped 1.5 cents or 2.5 per cent to 62.5 cents. The plantation company said it plans to sell some stakes in companies to plump up its coffers to fund the purchase of US food company Del Monte Foods.