US jobs report a lemon, but STI makes lemonade
SINGAPORE shares fended off the gloom surrounding the disappointing jobs data in the United States to clock modest gains yesterday.
The benchmark Straits Times Index (STI) climbed 22.05 points, or 0.78 per cent, to 2,831.28.
This was even as Wall Street lost 0.18 per cent on Friday following a dismal employment report which showed only 38,000 jobs were added in May, the smallest monthly increase in more than five years.
The "shocking headline" sank the US dollar and snuffed out all expectations of a June rate hike, noted IG market strategist Bernard Aw.
"The May non-farm payrolls will give Fed policymakers cause for pause, at least for June. If they are going to act, July will clearly be a better month to do so, or even September, depending on how the upcoming data pans out," he said.
Markets elsewhere in Asia were mixed. Tokyo dropped 0.37 per cent to a four-week low as the yen strengthened sharply against the US dollar, while Shanghai slipped 0.16 per cent, dragged down by financial and consumer shares.
On the other hand, Hong Kong added 0.4 per cent, Sydney grew 0.78 per cent and Jakarta rose 0.87 per cent.
"I guess the consensus now, in the light of Friday's data, is that the Fed will not raise the interest rates," Joseph Roxas, an analyst with Manila-based Eagle Securities, told Reuters. "So, let the good times roll."
At home, the STI was supported largely by the three local banks. United Overseas Bank jumped 37 cents or 2 per cent to $18.67, DBS Group Holdings put on 20 cents or 1.3 per cent to $15.70 and OCBC Bank advanced nine cents or 1 per cent to $8.76.
A DBS Vickers report said bank stocks such as OCBC and UOB will likely be "underpinned by higher US interest rate expectations as the year progresses that also implies an improving US economy".
Singtel also performed strongly, gaining five cents or 1.3 per cent to $3.95, while Ascendas Reit rose five cents or 2.2 per cent to $2.36.
Laggards included palm-oil producer Golden Agri-Resources, which sank 1.5 cents or 3.8 per cent to 38.5 cents, and Thai Beverage Public Company, down one cent or 1.1 per cent to 91.5 cents.
The day's most heavily traded counter was commodity trader Noble Group, which slumped 2.5 cents or 9.6 per cent to 23.5 cents on a turnover of 153.3 million shares, extending losses from last week after the group announced a one-for-one rights issue.
Some 859.5 million shares worth $808.9 million exchanged hands across the bourse.