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STI jumps 1.4% on Tuesday afternoon as investors eye US election results

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Also buttressing the STI was Sembcorp Industries which surged S$0.07 or 4.4 per cent to S$1.65.

SINGAPORE shares extended gains from earlier in the day in tandem with the rest of Asia on Tuesday afternoon, on expectations of a "blue wave" victory for Democratic candidate Joe Biden at the US presidential elections.

The stronger showing also comes on the back of a Wall Street rally overnight, with the Dow Jones Industrial Average leading major US indices to close 1.6 per cent higher.

CMC Markets' market analyst Kelvin Wong noted that two main catalysts can be attributed to the rally seen in the US stock market, one of which is the short-term technical oversold conditions after last week's steep decline on Wall Street. Secondly, polling averages before the US elections had indicated that Mr Biden was leading incumbent Donald Trump in six key battleground states - namely Florida, North Carolina, Pennsylvania, Michigan, Wisconsin and Arizona.

On the Singapore bourse, the benchmark Straits Times Index (STI) advanced 33.78 points or 1.4 per cent to 2,476.91 as at 1.02pm on Tuesday. Gainers outnumbered losers 268 to 111, after some 649.3 million securities worth S$466.2 million changed hands.

Among the most heavily traded by volume, Jiutian Chemical gained 0.6 Singapore cent or 7.1 per cent to 9.1 cents, with 167.1 million shares traded, while Sembcorp Marine climbed 0.6 Singapore cent or 5.3 per cent to 11.9 cents with 37.7 million shares traded.

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The trio of local lenders were all in the green following the midday break. DBS gained S$0.50 or 2.4 per cent to S$21.13, UOB added S$0.28 or 1.5 per cent to S$19.31, while OCBC climbed S$0.08 or 1 per cent to S$8.53.

On Monday, The Business Times reported that the Singapore banks' Q3 results will be in focus this week, as Malaysia's loan moratoriums have been tightened from automatic qualification to targeted debt holidays for applicable borrowers since this month. In particular, analysts are looking for the impact of the payment delay on UOB and OCBC, as Malaysia is a key market for both banks.

UOB will kick off the third quarter results season on Nov 4, followed by DBS and OCBC on Nov 5.

Also buttressing the STI was Sembcorp Industries which surged S$0.07 or 4.4 per cent to S$1.65. Sembcorp on Monday said it has sold its entire stake in its water business in Panama, with the divestment resulting in a net gain of S$21 million.

Meanwhile, food and beverage player Katrina Group surged 14.3 per cent or 1.3 Singapore cents to 10.4 cents as at 1.45pm on Tuesday. This comes after the Catalist-listed firm on Monday said its hospitality arm ST Hospitality is working with owners of at least three Singapore properties that will be reconfigured for its co-living model. 

In a research note on Tuesday, DBS analysts Yeo Kee Yan, Chung Wei Le and Janice Chua wrote that Asia prefers a Biden victory, as he will likely adopt a more “open and negotiable” approach with China. Tariffs may be reduced, which is positive for China’s recovery and bodes well for China-related stocks such as China Aviation Oil (CAO) and Hutchison Port Holdings Trust (HPH Trust), the analysts said. As at 2.03pm on Tuesday, CAO shares were up 1.5 Singapore cents or 1.6 per cent to 93.5 cents, while HPH Trust units had gained 0.3 US cent or 2.1 per cent to 14.5 cents. 

The DBS analysts added that companies such as Hi-P and Valuetronics which have production facilities and sales exposure to the US may also benefit. Both counters were up in the afternoon trade, with Hi-P climbing 5.2 per cent and Valuetronics advancing 1.9 per cent.

Separately, Pan Jingyi, senior market strategist at IG Singapore, noted that Singapore's October Purchasing Managers’ Index is due this evening, with the Republic looking for a fourth consecutive month of expansion. "The US election meanwhile remains the key event risk in the next 48 hours for the local market as well, awaiting the passage of this uncertainty," Ms Pan added. 

Elsewhere in Asia, South Korea led gains across emerging stock markets on Tuesday, as positive global factory data and expectations of a win for Mr Biden boosted sentiment in China and other regional markets, Reuters reported.

Stocks in Taiwan, Thailand and Shanghai all advanced over 1 per cent, while Seoul jumped nearly 2 per cent, driving the MSCI index of Asian shares ex-Japan up by more than 1 per cent.

Said Jeffrey Halley, senior market analyst of Asia-Pacific at Oanda: "Today, markets will turn themselves inside out and enter a state of analysis paralysis trying to forecast what asset class will do what under what scenario. My advice is to stay out of the noise and enjoy the show, your net worth and blood pressure will thank you."

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