Singapore shares gain 0.6% on Wednesday after strong Q3 US bank earnings

SINGAPORE equities raced ahead on Wednesday boosted by the rally on Wall Street, which was supported by optimism from strong Q3 earnings from major US banks the day before.

The Straits Times Index (STI) opened the day 0.4 per cent higher and built on early gains to finish at 3,134.71, advancing 18.54 points or 0.6 per cent. Anong other Asia-Pacific indices, Australia, Hong Kong, Japan, Malaysia and South Korea all posted gains.

Chinese markets were lower after Beijing voiced that it could retaliate if the US Congress passes a bill offering support to pro-democracy protesters in Hong Kong.

While strong earnings from US lenders as well as positives on the Brexit front may have made the case for a generally pro-risk Wednesday with traders preferring to feed off positive elements, it wouldn't hurt to look at the glass "half empty" either.

"The outlook is one of synchronised gloom," wrote Vishnu Varathan, Mizuho Bank's head of economics and strategy for the Asia & Oceania treasury, referring to the International Monetary Fund on Tuesday cutting global growth for 2019 to 3 per cent - the lowest since the global financial crisis.

In Singapore, trading volume stood at 1.33 billion securities, 14 per cent more than the daily average in the first nine months of 2019. Meanwhile, total turnover clocked in at S$1.19 billion, 12 per cent over the January-to-September daily average.

Across the market, advancers trumped decliners 223 to 174. Just four of the blue-chip index's 30 counters ended in the red.

Golden Agri-Resources was the STI's most active counter with 24.1 million shares traded. The counter dipped 0.5 Singapore cent or 2.3 per cent to close at 21 cents. On Tuesday, UOB Kay Hian maintained its "Sell" call on the agri-business firm with a target price of 16 cents. The brokerage cited that even though the second half of FY2019 should see a recovery in earnings on higher fresh fruit bunch production, concerns still remain on the older age profile of its oil palm trees and recent dry weather.

The local banks all ended higher. DBS Group Holdings closed up S$0.11 or 0.4 per cent at S$25.05, OCBC Bank finished S$0.08 or 0.7 per cent higher at S$10.86 while United Overseas Bank ended the day at S$26.00, up S$0.05 or 0.2 per cent.

There was a flurry of activity among companies in the second line.

Rex International advanced 1.2 Singapore cents or 15.2 per cent to 9.1 cents on 165.6 million shares, after news it had made an oil and gas discovery from the drilling of exploration and appraisal wells in the Norwegian Sea.

Meanwhile, AIMS Apac Reit (AA Reit) slumped following the completion of its sponsor's bookbuilding process. The industrial real estate investment trust (Reit) closed S$0.11 or 7.4 per cent down at S$1.37 with 101.8 million shares traded.