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Nikkei Markets

Singapore, Malaysia shares rise on US stocks rally

Planters, energy services firm edge higher, stronger commodity prices help

KUALA LUMPUR (Nikkei Markets) -- Singapore and Malaysia shares rose broadly Thursday along with other Asian markets thanks to a huge rally in U.S. equities and prices of commodities including crude oil and palm oil.

The Straits Times Index ended 1.1% higher at 3044.74. Jardine Strategic Holdings climbed 3.6%, the most among 27 gainers of the 30-stock index. The FBM KLCI closed up 1.1% at 1690.72 with 26 of the 30 stocks ending in the green, led by a 4.3% surge in Sime Darby.

"The sustainability of this rally, however, remains questionable," said CMC Markets Analyst Margaret Yang, noting mounting concerns over economic growth next year and a blurry outlook tracking political and economic uncertainties.

The sharp gains on Wall Street allowed investors to heave a sigh of relief following a sharp correction on Christmas Eve. Overnight, the S&P 500 Index jumped 5% after dropping for four straight sessions to the edge of a technical bear market.

Dow Jones Industrial Average also rose 5%. The Nasdaq Composite, which includes several technology heavyweights, soared nearly 6% after it recently entered a bear market.

"For Asian markets, downside is cushioned by relatively low valuation and those markets have outperformed U.S. for the last three months," said CMC's Yang. Still, concerns over trade war and rising interest rates, among other risks, may "slowly drain market liquidity," she cautioned.

In commodity news, crude oil prices advanced thanks in-part to the rally in U.S. equities. February Brent, the global benchmark for crude oil, rose close to 8% to $54.47 a barrel, helping lifting Keppel Corp. 2.5% in Singapore and Petronas Chemicals Group 1.9% in Malaysia.

Palm oil prices also rose with the most-traded futures for March delivery rising as much as 1.7% to 2,129 ringgit a ton on Bursa Malaysia Derivatives. Malaysia's Sime Darby Plantations surged 3.7%, while Singapore's Golden Agri-Resources added 2.2%.

Banks were also among the biggest winners. Hong Leong Bank rose 2.6% in Malaysia and Oversea-Chinese Banking Corp. was 1.6% higher in Singapore.

In corporate news, N2N Connect jumped more than 8% in Malaysia after the company announced the entry of SBI Japannext, which bought 11.65% stake in the company from major shareholder Andrew Tiang for 91.4 million ringgit ($21.91 million).

Malaysian gaming and resort conglomerate Genting rose 1.2%. The company said its indirect unit Resorts World Las Vegas plans to file response to the complaint by Wynn Resorts Holdings' before Jan. 14.

Hock Seng Lee rose 1.5% after the Malaysian construction firm announced that its consortium has secured a power substation contract worth 90.99 million ringgit. Hock Seng Lee has a 45% stake in the consortium.

- Jason Ng and Joannah Perez

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