STI closes higher as factory output soars

SINGAPORE shares were pushed into positive territory on Friday, following a surprising set of industrial production figures that eased worries about prolonged economic weakness.

Singapore's benchmark Straits Times Index (STI) climbed 0.88 per cent or 21.46 points to 2,472.28 on Friday. Gainers outpaced losers 231 to 192, with 1.25 billion securities worth S$890.48 million changing hands.

Singapore Exchange market strategist Geoff Howie said that the morning momentum came from renewed hopes for more US fiscal stimulus ahead of the US presidential election.

While weaker Europe opens whittled away that impact in the afternoon, key Singapore cyclicals were able to hold much of their ground, with industrial production numbers that "blew expectations out of the water", he said.

Singapore's factory output soared 13.7 per cent year on year in August, led by strong growth in electronics.

Said UOB economist Barnabas Gan: "Perceived risks arising from the Covid-19 pandemic appears to have greatly diminished at this juncture, owing to the sharp fall in Covid-19 infection rates in Singapore."

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Among the STI constituents, Dairy Farm International and CapitaLand Mall Trust were the best-performing counters. Dairy Farm rose 1.5 per cent or US$0.06 to US$3.96; CapitaLand Mall Trust edged up 1.5 per cent or S$0.03 to S$1.99.

Meanwhile, Singtel continued to see heavy trading with over 23 million shares changing hands. Shares of Singtel climbed 0.9 per cent or S$0.02 to S$2.14.

Other active counters include Thai Beverage, which closed flat at 58.5 Singapore cents. CGS-CIMB had on Thursday upgraded the beverage giant to "add" from "hold" and kept the target price at 70 Singapore cents.

Only two STI stocks ended the day in the red. SGX shed 0.4 per cent or S$0.04 to S$9.00, and SATS fell 0.4 per cent or S$0.01 to S$2.77.

Elsewhere in Asia, regional benchmarks including South Korea, Japan and Malaysia ended higher. Bucking the trend was the Hang Seng Index, which fell 0.32 per cent as fears of rising coronavirus infections and reimposition of containment measures continue to weigh on traders.