STI posts modest 0.1% gains even as Delta variant fears persist

SINGAPORE shares closed marginally higher on Thursday, partly owing to overnight gains in Wall Street on the release of tame inflation data, which quelled fears of the Federal Reserve tapering soon.

The key Straits Times Index (STI) rose 2.80 points or 0.09 per cent to 3,182.80.

IG Market Strategist Yeap Jun Rong said: "The consumer price index seems to support the stance of inflation being transitory, with some slight moderation in its growth rate on a year-on-year basis. That may help to ease some pressure of having out-of-hand inflation driving a pull-back in monetary policies from the Fed."

The current market consensus is a late-Q4 Fed tapering, which seems reasonable, although the risk appears weighted to an early surprise, said Nomura Research. It added that Fed policy normalisation will depend on actual data outcomes, not forecasts. On this note, the upcoming labour data out of the world's largest economy will be closely watched.

Worries over the surge in Delta variant cases cranked up after China partly shut the world's third-busiest container port after a worker became infected with Covid-19, in what is viewed could risk disrupting global trade. News that Beijing may widen its regulatory clampdown from Internet companies to insurance businesses also hurt trading sentiments.

Asia's key gauges from Japan, China, Hong Kong, Taiwan, South Korea to Malaysia all finished lower.

In the local bourse, turnover came in at 1.54 billion units worth S$1.03 billion. Losers outpaced gainers with 243 counters down and 223 up.

Singtel was the day's fourth most active with 64 million shares worth S$151 million done after the telco's latest quarterly results signalled that it has turned the corner on better operating and business environment with the easing of Covid-19 restrictions. The counter advanced six Singapore cents or 2.6 per cent to S$2.37. Geoff Howie, market strategist at the Singapore Exchange, said Singtel's 7 per cent total return over some three weeks has outpaced the global telecommunications sector's marginal gains.

Singapore Technologies Engineering rose five Singapore cents or 1.24 per cent to S$4.08. The defence and technology firm reported a 15 per cent rise in net profit for the first half to S$296 million from the year-ago period on the back of improved operating performance of its urban solutions and satellite communications as well as defence and public security segments.

Wilmar International added two Singapore cents or 0.45 per cent to S$4.51. The agri giant reported a 23 per cent jump in net profit for the first half of this year to US$750.9 million from a year ago. RHB Research said it expects second-half results to come in stronger. Given that the counter's valuation is "inexpensive", the house has maintained a "buy" on Wilmar, although it has revised the target price downwards to S$5.45 from S$5.75.