Ray of hope for STI amid Grexit shadow

The Singapore market brightened up slightly yesterday amid the shadow cast by the interminable Greek debt crisis.

A spark of optimism that Greece might eventually strike a deal with creditors allowed the Straits Times Index to edge up 7.99 points, or 0.24 per cent, to close at 3,340.93.

"To be sure, markets are still nervous, but they are not allowing it to turn into panic," said IG market analyst Bernard Aw.

He noted that sentiment in Asia, Japan and Australia are "noticeably improving" after the European Central Bank maintained Greece's liquidity support.

"The market is rather optimistic that the Greece crisis will be resolved.

"Nonetheless, I remain cautious for any recovery, as headline risks out of Greece will still move markets."

Yesterday's gains were led largely by bourse operator Singapore Exchange, which rose 19 cents to $8.16, and telco Singtel, up five cents to $4.32.

Rigbuilders Keppel Corp and Sembcorp Marine were also among the blue chips that posted the most gains. KepCorp added eight cents to $8.29, while SembMarine climbed one cent to $2.84.

The increases came despite the price of benchmark Brent crude falling to about US$57, after staying above the US$60 mark in the past two months.

Laggards included commodity plays Golden Agri-Resources and Olam International, which continued to post declines for the second straight day.

SIIC Environment Holdings, a Singapore-based company that specialises in water treatment and management, was the most active counter with about 102.7 million shares changing hands. The stock dipped 0.9 cent to 16.3 cents.

Commodities trader Noble Group, which has been embroiled in accusations over its accounting processes, closed flat at 71.5 cents.

It announced before trading that it has initiated a third-party review of its mark-to-market models and valuations - a move welcomed by the Singapore Exchange.

Sentiment was mixed elsewhere in the region as investors continued to keep an eye on the unfolding Greek debt situation.

Japan's Nikkei 225 bounced back 1.32 per cent after a 2.08 per cent fall on Monday, as bargain hunters moved in after digesting the news of Greece's referendum.

Meanwhile, the Chinese markets continued to tumble.

Hong Kong's Hang Seng Index slid 1.03 per cent, while Shanghai shares fell 1.29 per cent.

"It seems that the Chinese stock market's rebound on Monday, specifically the Shanghai shares, was nothing more than a short break," said Mr Aw.

He noted the shift in market tone - from bullish to bearish - has driven Shanghai equities down by nearly 30 per cent over the past three weeks.

The Dow Jones Industrial Average shed 0.26 per cent on Monday.


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