Singapore shares extend gains on Friday, up 1.6% on the week

THE local equity market posted a strong finish to the week as risk-on sentiment returned on hopes that the US could delay its plan to hit Mexico with tariffs, as well as dovish central banks pulling the trigger on rate cuts.

Singapore's Straits Times Index (STI) closed at 3,166.29, up 20.11 points or 0.6 per cent on Friday. On the week, the benchmark index advanced 48.53 points or 1.6 per cent from last Friday's close of 3,117.76, the first weekly gain in five weeks.

"It was a risk-on day with temporary relief with regard to trade tensions. This saw technology and consumer cyclical sectors leading the charge for markets, which should not come as a surprise here," IG market strategist Pan Jingyi said.

Like the local market, others in the Asia-Pacific region also closed in positive territory. Australia, Japan and Malaysia closed higher. China, Hong Kong and Indonesia markets were closed.

CMC Markets analyst Margaret Yang noted that regional markets were enjoying a technical rebound following a month-long sell-off in May, "but the sustainability of this rally must be accompanied by improving fundamentals, otherwise it would be groundless".

With a number of markets out of action due to holidays, trading volume in the local market was understandably lower.

Trading volume on the Singapore bourse clocked in at 544.66 million securities, less than half the daily average in the first four months of 2019. Total turnover came to S$801.75 million, 78 per cent of the January-to-April daily average.

Across the market, advancers trumped decliners 209 to 134. Meanwhile, the benchmark index had seven of the STI's 30 components in the red.

Genting Singapore, which closed unchanged at 86.5 Singapore cents, was the benchmark index's most traded stock, with 24.9 million shares changing hands.

Singtel shares, which have been on an uptrend in recent weeks, gained S$0.03 or 0.9 per cent at S$3.28. The telco has been outperforming the blue-chip index in recent weeks as investors continue to shift to more defensively positioned equity portfolios.

The local banks reversed Thursday's losses. DBS Group Holdings added S$0.14 or 0.6 per cent to S$24.39, OCBC Bank gained S$0.07 or 0.7 per cent to S$10.64 and United Overseas Bank (UOB) finished at S$24.23, up S$0.27 or 1.1 per cent.

Among the banking trio, UOB remains a top pick among analysts due to its lower valuation.

Real estate investment trusts (Reits) hogged the limelight on Thursday as investors took up positions on hopes of a rate cut by the US Federal Reserve. But many of those counters retracked on Friday due to profit-taking.

Frasers Centrepoint Trust units closed S$0.08 or 3.1 per cent lower at S$2.52 while CapitaLand Mall Trust finished S$0.02 or 0.8 per cent down at S$2.55.