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STI Surges Close to 3,000 Level

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by Donavan Lim

Singapore equities rallied on Friday despite uninspiring economic data.

Growth in China, the world second largest economy slowed to 7.6 per cent in the second quarter – triggering hopes for a stimulus package and giving a boost to investors.

“Overall we feel the numbers are probably the best-case scenario for risk assets, as the print was just weak enough to keep the markets’ anticipation of aggressive easing alive, while it was not too hot to take this notion away from the equation,” stated Justin Harper of IG Markets.

Singapore economy also lost momentum, reporting a 1.1 contraction in the second quarter, further adding to fears that the European contagion has arrived upon Asian shores.

The benchmark STI edged up 23.520 points, ending at 2,995.560 Friday, just 4.44 points shy of the 3,000 psychological resistance level.

Property counters with China exposure fared well. CapitaLand moved up 1 per cent to S$2.95 while Hong Kong Land surged 1.4 per cent to US$5.98.

Commodities counters delivered a mixed bag of performance. Noble Group stayed unchanged at S$1.105 while rival Olam International closed marginally higher to S$1.86.

Regionally, Nikkei 225 index closed marginally higher at 8,724.12 points while Hong Kong’s Hang Seng Index edged up to 19,092.63 points.

On late Friday, investors will have earnings on their radar screen with US companies, JP Morgan and Wells Fargo reporting their numbers.