Asian markets claw back losses after Fed eases fears of rate rise; STI up 1.7%

ASIAN markets clawed back Wednesday's losses on Thursday after the US Federal Reserve soothed investors' nerves by assuring that monetary policy would remain lower for longer.

The Hang Seng Index gained 1.2 per cent, following Wednesday's share dump after Hong Kong announced that stamp duties on stock transactions would rise for the first time in decades.

Japan's Nikkei 225 added 1.67 per cent, the Shanghai Composite Index rose 0.59 per cent, and Malaysia's KLCI added 1.54 per cent.

"China markets have quickly forgiven the Hong Kong stamp duty rise," Jeffrey Halley, senior market analyst, Asia-Pacific, at Oanda, said. "If nothing else, today's price action emphasises just how much capital remains on the sidelines, ready to be deployed on any material market dips."

The Straits Times Index (STI) has gone only one way this week: up. On Thursday, it rose another 48.96 points or 1.67 per cent to 2,973.54.

Some 2.23 billion shares worth S$1.96 billion changed hands, with gainers outnumbering losers 329 to 184.

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Among index stocks, Singapore Airlines rallied S$0.34 or 7.25 per cent to S$5.03 amid a global airline stock rally. This was after US regulators found that Johnson & Johnson's Covid-19 vaccine was safe and effective; and Australia's largest airline Qantas said that it aims to restart international travel in late October.

Sembcorp Industries added S$0.10 or 6.02 per cent to S$1.76 after analysts affirmed their "buy" calls on the stock for its ESG agenda, while United Overseas Bank added S$0.77 or 3.22 per cent to S$24.65, despite reporting a 32 per cent drop in fourth-quarter net profit. Its CEO Wee Ee Cheong said, however, that he expects to see a profit rebound in 2021.

The most active counter of the day was Thomson Medical, which added S$0.01 or 9.17 per cent to S$0.119, a two-year high, on a volume of 238.7 million shares traded.

It has been trading at elevated volumes since Feb 9, and has more than doubled its share price of S$0.049 on Feb 8 when it announced a reversal to the black for its first half ended Dec 31, 2020.