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Region relies on China's upbeat factory data
Publication Date : 03-09-2013
Investors put the horrors of August behind them and sent the battered market rising on the back of upbeat China manufacturing data.
The benchmark Straits Times Index (STI) leapt 26.78 points, or 0.88 per cent, to 3,055.72 on Monday, amid a regional rally on September's first trading day.
About 3.8 billion shares worth S$1.2 billion (US$943 billion) changed hands here.
August was a month to forget for the local bourse, with the STI sinking 6 per cent for the period - its worst monthly plunge since May last year.
"We are confident that the global economy is still performing as we had expected," said Gary Dugan, chief investment officer for Asia and the Middle East at Coutts, a private bank. "Hence, we retain a constructive view of equities, although we remain somewhat concerned about some of the near-term risks."
Monday's regional rally was sparked by news that China's factory output exceeded economist expectations to hit a 16-month high in August, boosting the belief of a global economic recovery. It sent Hong Kong up 2.04 per cent, Japan 1.37 per cent higher and put Australia 1.04 per cent in front.
Here, the 30 STI component stocks ended mostly up, with 16 gainers, eight losers and six unchanged.
The winners included Jardine Cycle & Carriage, up S$1.05 to S$34.22, and commodity stocks Noble Group, S$0.02 higher to S$0.83, and Olam International, which added S$0.035 to S$1.47.
In contrast, ComfortDelGro slipped S$0.015 to S$1.83 and StarHub slid S$0.03 to $4.17.
China Minzhong surged S$0.60 cents to S$1.125 when it resumed trading, on news that Indonesia food giant Indofood had offered S$488 million, or S$1.12 per share, for the rest of the vegetable processor. It already holds S$0.33 per cent. Trading on the stock was halted last Monday after a US short-seller accused the firm of falsifying sales and other figures.
Analysts anticipate that the week ahead could be a turbulent one for the market, due to a host of economic data coming out and central bank meetings. "With such a power-packed week occupied by both political and economic events, we will not be surprised if we see large market gyrations and volatility," said CMC Markets analyst Desmond Chua.
Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors, said the key market-moving events to watch will be Syria and United States economic data.
He said: "The focus is likely to be on the US manufacturing conditions (due Monday night) and (Friday's) payroll employment data as guides to whether the Fed will commence tapering its monetary stimulus this month."
*US$1 = S$1.27