Singapore stocks advance at open, tracking Wall Street rally; STI up 1.9%

SINGAPORE shares were pulled into positive territory on Monday, led by strong gains from Wall Street last Friday.

"Asia markets look set to open broadly higher on Monday, backed by strong US non-farm payroll figures, the passing of the US$1.9 trillion fiscal stimulus bill in the Senate and rising crude oil prices," DailyFX strategist Margaret Yang told The Business Times on Monday.

"In Singapore, industrial, materials, financials and other cyclically-sensitive sectors may outperform the defensive ones due to rising reflation hopes," she added.

The benchmark Straits Times Index (STI) jumped 56.89 points or 1.9 per cent to 3,070.74 as at 9.02am. Gainers outnumbered losers 143 to 30, after 93.3 million securities worth S$111.3 million changed hands.

The most heavily traded counter by volume was Oceanus, which rose 0.2 Singapore cent or 4.7 per cent to 4.5 cents with 13.7 million shares traded.

Yangzijiang Shipbuilding was also up, gaining S$0.05 or 4.6 per cent to S$1.13, with 11.4 million shares changing hands. This comes after the mainboard-listed company on Friday said it has entered into shipbuilding contracts for another 31 vessels worth some US$1.74 billion.

Amid a sea of green, the trio of local lenders were up in early trade. DBS added S$0.82 or 3 per cent to S$28.51, UOB gained S$0.23 or 0.9 per cent to S$25.68, while OCBC rose S$0.17 or 1.5 per cent to S$11.66.

Jardine Strategic Holdings surged US$6.35 or 23.1 per cent to US$33.80, while Jardine Matheson Holdings jumped US$1.25 or 2.3 per cent to US$54.94. On Monday before the market opened, Jardine Matheson announced that it will simplify the parent company structure of the group by acquiring the 15 per cent of Jardine Strategic Holdings it does not already own. The acquisition is valued at about US$5.5 billion.

Over on Wall Street, equities ended sharply higher on Friday after a volatile session, with the Nasdaq rebounding at the end of a week that saw it extend losses to about 10 per cent from its previous record high. The Dow Jones Industrial Average rose 1.9 per cent to end at 31,496.30 points, the broad-based S&P 500 gained almost 2 per cent to 3,841.94, while the tech-rich Nasdaq Composite climbed 1.6 per cent to 12,920.15.

European stocks finished lower on Friday as bond yields rose on inflation expectations that were pushed up by strong US payrolls data. The pan-European Stoxx 600 dropped 0.8 per cent on the day, with shares of travel and financial services firms leading losses.

Elsewhere in Asia, Tokyo stocks opened higher on Monday, supported by rallies on Wall Street after better-than-expected key US jobs data. The benchmark Nikkei 225 index was up 1 per cent or 298.67 points at 29,162.99 in early trade, while the broader Topix index also added 1 per cent or 18.32 points to 1,914.50.

"The Federal Open Market Committee is in blackout zone, so investors are left to their own devices and data will be important... I think with all the focus on inflation, market participants will now have to trade the inflation data, with the February consumer price index and producer price index releases being the main events on Wednesday and Friday," said Axi chief global markets strategist Stephen Innes.

IG senior market strategist Pan Jingyi noted that rising bond yields remain the key theme to watch going into this week, after the climb in US Treasury yields spooked markets last week. She added that central bank comments, including those from the upcoming European Central Bank meeting on Thursday, will all be closely followed.