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Straits Times 3,304.27 -7.26 -0.22%
Hang Seng 28,185.98 -327.02 -1.15%
Dow Jones 26,548.22 -179.32 -0.67%
Shanghai Composite 2,982.07 -26.07 -0.87%
Unexpected Markets Rebound Despite Bad News
Singapore Market Commentary | 21 September 2018
By: Jimmy Ng
Articles (50) Profile

US escalated its trade war with China as President Trump announced on 17 September that he would go ahead with imposing 10 percent tariffs on about US$200 billion worth of Chinese imports that will take effect on 24 September and potentially going up to 25 percent by the end of the year. In retaliation, Beijing added US$60 billion of US products to its import tariff the very next day.

Despite the negative news, markets seemed already mentally prepared for them seeing strong rebounds across major Asian bourses amidst heavy bargain hunting on 19 September.

Over the last two weeks, Dow Jones Industrial Average gained 2.5 percent to finish at 26,656.98.

Apart from the economic worries coming from China, Hong Kong was also devastated by Typhoon Mangkhut, the most intense storm to hit the city since records began. As the city recovers, it is estimated that the damage this year could be 10 to 15 percent more than the overall economic impact of a typical T8 signal warning typhoon on Hong Kong’s GDP. Last fortnight, Hang Seng Index rose 3.6 percent ending at 27,953.58.

On the local bourse, telco Starhub is to be dropped from benchmark Straits Times Index (STI) which would be replaced by retailer Dairy Farm with effect from 24 September 2018. This would raise the STI’s weightage of the Jardine group companies, together with Jardine Matheson, Hongkong Land, Jardine Strategic and Jardine Cycle & Carriage, to an indicative 15.4 percent. STI grew by 2.7 percent in the last two weeks to close at 3,217.68.

The yield of US 10 Year Treasury Note spiked as high as 3.09 percent on 19 September, on wide expectation that the Fed is going to raise rates during the FOMC meetings to be held on 25 and 26 September.

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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