Asian markets got some spring back in their step yesterday, chalking up strong gains across the region as investors bet that the Federal Reserve looks set to delay the rate hike potentially to next year.
In another data-dominated session, all key markets in Asia cheered after official United States data released overnight showed that retail sales rose only 0.1 per cent last month, while retail sales in August were revised to show no growth.
This added to market hopes that the Fed will not raise interest rates in December as previously expected.
Barclays senior economist Leong Wai Ho told The Straits Times: "This is the dark before dawn in the US, where consumer demand typically picks up towards Christmas.
"But the Fed will want to see its glide path laid out properly. It will wait for more data to confirm the timing for a rate hike, which we think will be in March next year instead of December this year."
Reflecting that sentiment, regional benchmark MSCI Asia ex-Japan shot up to its highest level since mid-August.
Shanghai jumped 2.32 per cent and Hong Kong added 2 per cent, with investors there also expecting Beijing to announce more stimulus measures to stabilise the flagging economy, possibly in the Communist Party five-year plan meeting between Oct 26 and 29. Tokyo rose 1.15 per cent and Kuala Lumpur added 0.12 per cent.
In Singapore, the benchmark Straits Times Index closed 31.22 points or 1.05 per cent higher at 3,015.14, staying above the 3,000 resistance level through the day.
Noble stayed in the spotlight, again one of the top active counters in the market with 56 million shares transacted. Its shares also rose for the second day, up two cents or 4.21 per cent to 49.5 cents.
Jefferies analyst Abhijit Attavar gave Noble a buy call, despite global commodity woes that have also battered companies such as Glencore.
"Noble has a significantly different asset mix and earnings composition as compared with Glencore's," he said in a note yesterday.
Wilmar International rose seven cents or 2.43 per cent to $2.95, and Sats was up seven cents or 1.89 per cent to $3.78.
All three local banks resumed their mini-rally since the start of this month after the blip this week, with DBS Group Holdings gaining 22 cents or 1.26 per cent to $17.65. OCBC Bank put on 11 cents or 1.19 per cent to $9.32, and United Overseas Bank rose 26 cents or 1.31 per cent to $20.07. The defensive sector will remain under investors' watch ahead of their third-quarter results in the coming weeks.
Meanwhile, Yangzijiang Shipbuilding was the only blue chip counter that ended in red ink, down one cent or 0.79 per cent to $1.25.
But the largely bullish session yesterday might only be a temporary reprieve, Mr Leong said. "The expectations of a delayed rate hike will provide some brief respite to the equities markets, but those in the market will prefer having clarity on the rate hike rather than seeing this uncertainty replaying itself."
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