For the fortnight, oil prices continued its rally backed by the unexpected decline in US oil stockpiles which saw US production drop 290,000 barrels per day to 9.5 million. This drove crude oil brent prices to exceed US$70 per barrel for the first time in three years, touching an intraday high of US$70.34 on Tuesday.
As bullish sentiment marched on in the US market coupled with rallies from technology and healthcare sector, major indices broke new highs. Dow Jones Industrial Average (DJIA) closed at record high of 26,115.65 on 18 January while S&P 500 and NASDAQ closed at all-time highs of 2,802.56 and 6,810.28 respectively.
In Asia, China’s GDP expanded by 6.9 percent in 2017 despite the government’s crackdown on rising debt levels. In addition, it surpassed government expectations of 6.5 percent for the year and was higher than 2016’s GDP of 6.7 percent. Of more significance, this was the first time since 2010 that China had a year-on-year economic growth. China’s trade surplus with US also hit a record high of $275.81 billion in 2017. However, trade protectionism may harm China’s economy as US President Donald Trump seeks to readdress the massive trade deficit with China.
Following suit, other Asian markets rallied with Hang Seng Index (HSI) smashing record high of 31,983.41 since the global financial crisis while the Shanghai Composite Index remains firmly on an uptrend, increasing by 0.91 percent to close at 3,474.75 on 18 January. Over the fortnight, Nikkei 225 Index rose by 3.9 percent to close at 23,808.06 while it hit a 26-year high earlier this week boosted by weaker yen.
Singapore’s non-oil domestic exports (NODX) rose by 3.1 percent in December which is much lower than previous month of 9.1 percent, primarily due to 5.3 percent drop in electronics shipments and 6.8 percent rise in non-electronic shipments. Nevertheless, NODX growth of 9.2 percent for 2017 is the highest since 2010. With the surge in the equities market, Straits Times Index (STI) caught on and rose to a 10-year high of 3,550.21 on 16 January.