STI ekes out 0.34% gain to 2,572.36

THE Straits Times Index (STI) shrugged off the dismal Purchasing Managers' Index (PMI) reading reported on Monday and staged a small turnaround on Tuesday, chalking up slim gains of 0.34 per cent or 8.67 points to close at 2,572.36.

This came as the Wall Street had a late-session rally on Monday as governments relaxed lockdown measures and oil prices continued to perk up.

But it remains to be seen if the uptick can be sustained. DBS Equity Research has sounded a note of caution. "The four-week 'circuit-breaker' extension till June 1 that has affected the dividend payout date for some companies could mean a two-to-four week delay to 'sell in May and go away' this year, " the team wrote.

DBS Equity Research has lowered its STI year-end target to 2,850 from 3,350. It commented: "The current STI rally should be capped at 2,670 to 2,740 in the near-term with subsequent technical downside risk to 2,300 in the coming months."

In total, 1.04 billion shares worth S$969.45 million were traded on Tuesday. This value was about S$500 million less than Monday's S$1.47 billion, which itself was S$1 billion less than the S$2.44 billion traded in the preceding session last Thursday.

Topping the performance table of the index constituents was DBS Group, which was trading cum dividend. The counter ended at S$19.70, up S$0.13 or 0.66 per cent. Both research houses UOB Kay Hian and Phillip Securities Research recommended a "buy" call on the stock with the largest market value on the Singapore Exchange. 

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Interestingly, Monday's STI best performer Jardine Strategic Holdings on Tuesday lost more than the US$0.35 gained a day earlier. The conglomerate shed US$0.69 or 3.15 per cent to end at US$21.21.

The most heavily traded stock was Yangzijiang Shipbuilding, which declined one Singapore cent or 1.03 per cent to S$0.96.

Advancers outnumbered decliners 282 to 155.

Japan, South Korea and China markets were closed for holiday, while most Asian markets posted gains.

The Hang Seng Index was up 1.08 per cent to 23,868.66, after Hong Kong dialed down social distancing restrictions implemented to curb the spread of the pandemic. Australian shares closed higher, with the S&P/ASX 200 index up 1.64 per cent to 5,407.07. The FTSE Bursa Malaysia Kuala Lumpur Composite Index gained 0.94 per cent to close at 1,389.55 points.