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Global Equities Begin New Year On Positive Note
Singapore Market Commentary | 13 January 2017
By: Jimmy Ng
Articles (49) Profile

In the last fortnight, global equities mostly traded up on positive market sentiments. The first trading day of the New Year saw most equity markets closing in the black, with the Hang Seng Index climbing 0.7 percent, while Nikkei and Shanghai Stock Exchange Composite Index up 2.5 percent and 1 percent respectively.

Major indices on Wall Street registered marginal gains, extending the bullish sentiments on the continued Trump rally. Dow Jones Industrial Average marked out an intraday record high of 19,999.63 during trading on 6 January, just 0.37 points short of the elusive 20,000 psychological level. However, it only managed to close at 19,891, 0.4 percent higher than last fortnight’s close. Meanwhile, the Nasdaq Composite index broke a new record high by closing at 5,563.65 on 11 January riding on a seven-day winning streak, but ends the rally by retreating 16.16 points on 12 January. Overall the tech-heavy index still rose 2.1 percent to finish at 5,547.49 as compared to a fortnight ago. The S&P 500 also added a modest 0.9 percent gain to close at 2,270.44.

On the local front, the Ministry of Trade And Industry Singapore (MTI) issued a press release on 3 January reporting that based on advance estimates, Singapore’s Gross Domestic Product (GDP) grew by 1.8 percent for the fourth quarter of 2016, an improvement from the 1.2 percent recorded in the previous quarter. The official figure announced by MTI was also higher than its earlier forecast for a growth of ‘1.0 to 1.5 percent’.

Consequently, the Straits Times Index broke above the 3,000 level on better-than-expected economic growth. Closing at 3,025.07, the local index posted a gain of 4.7 percentage points over a fortnight ago, with the positive trend spilling over across the board with FTSE ST Catalist gaining 5.2 percent, the FTSE ST Large/Mid Cap expanding 4.9 percent as well as the FTSE ST Small Cap adding 1.7 percent.

Sector-wise, individual sector experienced various degrees of rally with the technology sector emerging as the biggest winner. Possibly boosted by the record-breaking Nasdaq’s gravity-defying feat, the FTSE ST Technology Index rose 8.5 percent. Utilities sector, on the other hand, underperformed the broader market with the FTSE ST Utilities Index posting a slight gain of merely 0.6 percent.

Going forward, investors may want to pay attention to the upcoming consumer price data coming out of Britain and US, as well as data on crude oil inventories which may impact oil prices.

Equipped with a Bachelor in Mechanical Engineering and a few years of experience in the finance industry, Jimmy hopes to help investors gain deeper insights and make well-informed decisions by sharing his perspective.

Please click here for more information about this author.

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