STI leads region with 1.1% rise on back of vaccine optimism

THE Straits Times Index (STI) continued its ascent on Tuesday, following on the heels of Wall Street, where the S&P hit a record high overnight, as well as positive sentiment on the early success of Moderna's vaccine results.

In Singapore Exchange market strategist Geoff Howie's words: "Markets are taking stock in the fact that the big vaccine news is walking the walk."

Singapore's benchmark index led the region with its 30.55-point or 1.1 per cent incline to 2,778.55, as 3.21 billion securities worth S$1.75 billion changed hands. Advancers outnumbered decliners 284 to 199.

The index's top performer was Singapore Airlines - possibly the greatest beneficiary of a successful vaccine development. Its shares rose S$0.19 or 4.9 per cent to S$4.06. The aviation group had on Tuesday said that it was doubling its multicurrency medium-term note programme limit to S$10 billion to raise funds for general corporate or working capital purposes.

The worst index performer was Ascendas Reit, which finished the day S$0.08 or 2.6 per cent lower at S$2.97. Its units had started declining since it announced a S$1.2 billion equity fundraising to finance potential and proposed acquisitions in the United States, Europe and Australia.

Regional indices were mostly up. The Hang Seng Index added 0.13 per cent; Malaysia's KLCI gained 0.66 per cent. The Nikkei 225 advanced 0.42 per cent, while the Shanghai Composite dipped 0.21 per cent.

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The most active counter of the day was LionGold, whose shares rose S$0.001 to S$0.002, on a volume of 798 million shares, after it posted slightlyimproved earnings of S$1.35 million for its first quarter ended Sept 30 last week.

Stephen Innes, chief global markets strategist at Axi, said that after big gains for risky assets following the US election result, last week's announcement of a potentially successful Covid-19 vaccine provided a second catalyst to spur markets higher, with most of the funds rotating into the laggard, cyclical and "reopening" sectors.

"The vaccine news has understandably led to more positive sentiment. And seen from a down-the-road perspective, it's hard to argue that we will not be in store for a positive economic reassessment and improved macro environment, which will prove risk-positive and provide a favourable backdrop for risk assets," Mr Innes said.