Asian bourses swop fears for cheers

Asian markets recovered slightly yesterday, thanks to better news out of Greece and China.

Greece came up with a fresh economic reform proposal late on Thursday, offering to meet most of the demands made by its creditors in a bid to win new funds and keep its place in the euro zone.

Renewed hope that a bailout deal could take place tomorrow lifted sentiment on Wall Street, where the Dow Jones Industrial Average rose 0.19 per cent.

"The proposals appear to offer additional concessions from Greece on the key issues that have stalled negotiations this year," Oanda senior market analyst Craig Erlam told Reuters. "(The proposals) could offer a platform on which a deal could be agreed this weekend."

In China, markets rallied in the wake of government efforts to restore investor confidence, shaking off the brutal selldown that took place over the last three weeks.

Shanghai shares jumped 4.54 per cent, while Hong Kong's Hang Seng Index gained 2.08 per cent.

The Nikkei 225 Index in Japan, however, slipped 0.38 per cent.

IG market strategist Bernard Aw remained sceptical of China's rebound. "The government measures have distorted the normal functioning of the equity markets," he said.

Still, the brighter overall sentiment sent the Straits Times Index up 12.48 points, or 0.38 per cent, to 3,279.88.

Yesterday's gains were steered largely by vehicle-distribution giant Jardine Cycle & Carriage, which rose 77 cents to $31.77.

Bourse operator Singapore Exchange also did well, climbing 15 cents to $8.13, while Singtel edged up three cents to $4.29.

Singapore Technologies Engineering added five cents to $3.31 following the firm's announcement on Thursday that its aerospace arm clinched new contracts worth $920 million in the second quarter of this year.

On the other side of the ledger, Singapore Airlines tumbled 15 cents to $10.80, while United Overseas Bank dropped six cents to $22.76.

Outside of the blue chips, oilfield services firm Ezra Holdings gained 0.1 cent to 15.8 cents. This was despite the group reporting on Thursday that it recorded a net loss of US$3 million (S$4 million) for the third quarter ended May 31. OCBC Investment Research analyst Low Pei Han said in a report that the results were "below expectations".

"Looking ahead, the operating environment of the subsea division is expected to be challenging, and the offshore support vessel segment is also expected to see lower charter rates as well."

She maintained a "hold" rating on the stock.

SIIC Environment, which specialises in water treatment and management, was again the day's most active counter, with 78.6 million shares changing hands. The stock closed one cent up at 18.3 cents.

tsjwoo@sph.com.sg

This article was first published on July 11, 2015.
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