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SINGAPORE – Better data from China and signs that cashed-up American consumers will keep spending galvanised regional markets on Friday.
Local investors showed their enthusiasm by driving the Straits Times Index (STI) up 1 per cent or 31.18 points to 3,280.69 and 2.3 per cent ahead for the week.
Gainers trounced losers 351 to 227 on the broader market after 1.8 billion shares worth $1.7 billion changed hands.
Major regional markets also made the most of the positive news to end the week on a high note.
Japan’s Nikkei 225 and South Korea’s Kospi both gained 1.1 per cent, while the Hang Seng in Hong Kong rose 0.8 per cent.
The Australian market was even more bullish, advancing 1.3 per cent and up 1.7 per cent for the week.
The gains followed a better night on Wall Street, with investors defying inflation on the back of strong consumer data to send the S&P 500 and the tech-laden Nasdaq up 0.8 per cent while the Dow Jones Industrial Average put on 1 per cent.
Mr Stephen Innes, managing partner at SPI Asset Management, noted that markets turned “surprisingly bubbly” as China’s retail sales and factory output exceeded forecasts.
“There’s a growing sense of optimism among a cohort of investors who believe that Beijing’s initiatives to stimulate the economy and stabilise financial markets are showing signs of success, following the sharp sell-off in August that witnessed record foreign fund outflows from onshore China stocks,” he said.
However, he warned that a single month of positive data does not confirm “a sustained path to recovery”, noting that “there have been indications that the surge in spending seen earlier this year is starting to taper off, and the challenges in the real estate sector remain a significant hurdle”.
The STI’s top gainer was Mapletree Pan Asia Commercial Trust, up 2.7 per cent to $1.53, while Emperador was at the bottom, shedding 1 per cent to 51 cents. THE BUSINESS TIMES
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