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Singapore shares soar 1.5% on Wednesday amid Trump-Xi meeting hopes
INVESTORS already seem sold into thinking that rate cuts by the US Federal Reserve are a certainty. With news that US President Donald Trump and his Chinese counterpart Xi Jinping are set for an "extended meeting" at the G-20 summit, and dovishness from other central banks added to the mix, risk-on attitudes returned to the fore.
Buoyed by the sentiment, Singapore's Straits Times Index (STI) closed at 3,288.17, rising 49.44 points or 1.5 per cent.
"Investors are clearly in a euphoric state of mind as easing of US-China trade tensions, fused with the anticipation for the Federal Reserve Board to define an overtly dovish tone, have equity markets surging in Asia," wrote Vanguard Markets managing partner Stephen Innes.
Meanwhile, CMC Markets analyst Margaret Yang told The Business Times that both dovishness from central banks and the sense that US-China trade relations have thawed "led to an extension of relief rebound in Singapore equity market, which has largely outperformed its regional peers since early June".
It was more of the same for the rest of the region as Australia, China, Hong Kong, Japan, Malaysia and South Korea all clocked gains. Of the lot, Hong Kong's Hang Seng Index fared the best, adding 703.37 points or 2.6 per cent to close at 28,202.14. Australia's ASX 200 added 78.10 points or 1.2 per cent, extending an 11-year high.
In keeping with the risk-on mood, the Singapore market had another day of vibrant turnover on its hands. Trading volume clocked in at 1.63 billion securities, 36 per cent over the daily average in the first five months of 2019. Total turnover came to S$1.46 billion, 40 per cent over the January-to-May daily average.
Across the market, advancers trumped decliners 293 to 140. Just a single counter - Dairy Farm International - of the STI's 30 components closed in the red.
Financials led the way, with DBS Group Holdings finishing S$0.63 or 2.5 per cent higher at S$25.43, OCBC Bank gaining S$0.23 or 2.1 per cent at S$11.18 and United Overseas Bank finishing at S$26.14, advancing S$0.54 or 2.1 per cent.
DBS shares were given an additional boost following an upgrade of the bank's stock to "Buy" by OCBC Investment Research, which said it was an opportune moment to enter positions on the stock. The research house maintained its fair value for DBS at S$29.18.
While most counters rose, some real estate investment trusts (Reits) closed lower on profit-taking, with some traders preferring to take money off the table after the recent surge in interest in the sector.
Mapletree Industrial Trust units fell four Singapore cents or 1.8 per cent at S$2.13 while Frasers Centrepoint Trust eased two Singapore cents or 0.8 per cent to end at S$2.59.
The risk-on mood also saw tech manufacturing stocks outperform the benchmark index. Venture Corp added 35 Singapore cents or 2.1 per cent at S$17.10 while AEM Holdings advanced three Singapore cents or 2.9 per cent to end at S$1.06.