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Singapore shares extend winning streak, Malaysia falls

KUALA LUMPUR (Nikkei Markets) — Singapore shares rose for the fifth straight session thanks to strong oil prices that lifted shipbuilders and offshore services stocks even as Sino-U.S. trade tensions lingered. Malaysia fell as telecom shares slipped.

The Straits Times Index ended 0.5% higher at 3236.08, racking up more than 3% gain over the past five days. Keppel Corp. added 1.9% while Yangzijiang Shipbuilding (Holdings) added 1.7%. The FBM KLCI closed 0.3% lower at 1794.47 as Axiata Group slumped 4.4% and Telekom Malaysia fell 1.5%.

“If OPEC is unable to ramp up production, then oil prices do indeed have much further to run as this will be viewed as an extremely bullish signal for near-term prices,” said Stephen Innes, head of Asia Pacific trading at OANDA.

Brent, the global benchmark for crude oil, has risen to a four-year high around $82 a barrel as the Organization of the Petroleum Exporting Countries and Russia declined to commit to higher output to address potential supply disruption from upcoming U.S. sanctions on Iranian crude oil exports.

The Nikkei Asia300 Index edged up 0.1% after a relatively rangebound session. Washington began collecting tariffs on $200 billion of imports from China on Monday and Beijing on $60 billion of U.S. shipments. This is in addition to the $50 billion already imposed previously by both the countries.

Investors are largely cautious ahead of the two-day Federal Reserve meeting that starts later in the Asian day. The Fed is expected to raise interest rates for the third time this year after the meeting and will likely signal that it remains on course for a fourth hike in December.

“The risk rally quickly dissipated with the market finally reacting to the US tariffs on China, which went into effect on Monday,” said ING Asia. “Investors now turn to the Fed for clues on the rate hike momentum with the Powell press conference and dot plots seen to be the highlight on Wednesday.”

Sembcorp Marine added 2.5%. The stock is most sensitive to changes in oil prices, according to DBS Group. Its parent Sembcorp Industries rose 2%.

Liftboat operator Ezion Holdings, among the most heavily traded, advanced 4.2% in Singapore.

Bucking the decline in Malaysia, oil and gas services firms Serba Dinamik Holdings and Velesto Energy added 0.3% and 1.8% respectively. Sapura Energy rose 2.3%, also aided by news of new contracts totaling 815 million ringgit ($197.04 million).

In corporate news, CIMB Group Holdings slipped 0.5% after the second-largest Malaysian bank by assets announced that Chairman Nazir Razak will step down from all positions by end of 2018.

Malaysian construction firm Bina Puri Holdings slipped 2.3% following comments from executive director that its mainstay business may stay unprofitable for rest of 2018.

Mynews Holdings ended unchanged after gaining as much as 2% in the day following a strong third-quarter earnings. The convenience store chain operator reported that its net profit rose 18% on-year to 7.27 million ringgit, while revenue grew 20% to 97.88 million ringgit.

– Jason Ng and Joannah Perez