Investor optimism lifts Singapore shares, STI up 1.3%

SINGAPORE shares climbed on Monday as investor optimism was boosted by positive news both locally and globally.

Amid the extension of deadline for post-Brexit trade talks, continued developments on the vaccine front and in anticipation of the news that the Republic will be entering its next phase of recovery, the benchmark Straits Times Index (STI) gained 1.29 per cent or 36.44 points to close at 2,858.14.

Addressing the nation at 5pm on Monday, Prime Minister Lee Hsien Loong said Phase 3 of Singapore's reopening will start on Dec 28, with gatherings of up to eight people to be allowed. The country has also approved the Pfizer-BioNTech vaccine for use, with the first shipment estimated to arrive by the end of this month.

Among the STI constituents, ComfortDelGro was top gainer for the day, rising 3.64 per cent or S$0.06 to close at S$1.71.

Coming in a close second was CapitaLand Integrated Commercial Trust, which climbed 3.35 per cent or S$0.07 to close at S$2.16; followed by Sats, which ended the day 2.68 per cent or S$0.11 higher at S$4.22.

"Amidst expectations of improvement in private consumption, we favour initiating positions in cyclical growth stories with greater exposure to domestic demand recovery, while remaining cautious on global cyclicals that are vaccine dependent," said RHB analyst Shekhar Jaiswal in a note on Monday.

He added that the STI is expected to "reverse its underperformance relative to Asian peers in 2021", following increasing optimism around "improvement in economic activity, sustained improvement in private consumption, strong improvement in business confidence as vaccines become available in late 2H21, and greater investor participation amidst a return of funds flow to Asia".

Advancers outnumbered decliners 265 to 180 for the day, with 2.17 billion securities worth S$1.31 billion changing hands.

Across the region, Asian markets ended the day mixed.

South Korean shares dipped on Monday amid a spike in cases, with the benchmark Kospi ending 0.28 per cent or 7.86 points down at 2,762.20.

The country ordered schools to close from Tuesday in the capital Seoul and surrounding areas, after the Korea Disease Control and Prevention Agency on Monday reported 718 new coronavirus cases. On Sunday, new daily infections hit a new high of 1,030.

Similarly, in Hong Kong, the Hang Seng index fell 0.44 per cent or 116.35 points, to close at 26,389.52.

Meanwhile, Tokyo stocks closed higher after the Bank of Japan's key business confidence survey showed improvement for the second straight quarter. The Nikkei 225 Index advanced 0.3 per cent or 79.92 points to end at 26,732.44.