KUALA LUMPUR (Nikkei Markets) -- Malaysia and Singapore benchmarks advanced Thursday as heavyweight banking stocks rallied following sharp overnight gains on Wall Street amid rising U.S. bond yields.
The FBM KLCI ended 0.5% higher at 1785.81 while the Straits Times Index rose 0.2% to 3473.08. The Malaysian ringgit and Singaporean dollar remained relatively steady against the U.S. dollar ahead of the Federal Reserve meeting next week.
"The new government stands to make big savings from cancellation of large projects, which can be channelled into other segments of the economy," said Areca Capital Chief Executive Danny Wong in Malaysia. "This could translate to earnings upgrades and higher demand for corporate financing."
Asia markets gained Thursday, picking up from a strong showing by all main U.S. equity benchmarks. The Dow Jones Industrial Average surged 1.4% backed by a rise in financial stocks that benefited from rising U.S. Treasury yields. The Nasdaq rose 0.7% for a third consecutive record close.
President Donald Trump's plan to hold bilateral talks with his French counterpart and Canadian Prime Minister Justin Trudeau this weekend also fuelled hopes of defusing simmering trade tensions among the world's most industrialized nations. Data showing a seven-month low U.S. trade deficit in April also lifted sentiment.
"The STI has traded within a fairly tight range over the last two weeks," said CMC Markets sales trader Oriano Lizza. "This is a direct reflection of the current tug of war between positive underlying fundamentals and trade concerns."
Singaporean lenders United Overseas Bank and Oversea-Chinese Banking Corp. climbed 0.8% and 0.3% respectively. Malaysia's biggest bank by assets, Malayan Banking, ended 5.6% higher, while close rival CIMB Group Holdings rose 2.1%.
Real estate counters outperformed the broader market. City Developments surged 2.4% for the day, while Hongkong Land edged up 1.8%.
"The recent report about property broker PropNex eyeing an initial public offering, as well as strong fundamentals given the country's gross domestic product numbers, make real estate an attractive investment for local and overseas investors," said CMC's Lizza.
State-linked Telekom Malaysia rallied 5.6% after chief executive Shazalli Ramly resigned from the company, amid a string of departures from top corporate and government positions following the surprise victory of the opposition Alliance of Hope coalition in Malaysia's election last month.
Astro Malaysia Holdings, a pay TV operator, dropped 9.8%. The company had reported a 10.8% drop in first-quarter net profit, weighed by higher net finance costs. Shares had jumped over 14% a day earlier following reports that its major shareholder mulled taking the company private.
Barakah Offshore Petroleum jumped 76%. Serba Dinamik Holdings Chief Executive Abdul Karim Abdullah told Nikkei Markets the company was in talks to acquire a stake in Barakah.
-- Alexander Winifred and Joannah Perez