Banks get a fillip from OCBC
SINGAPORE stocks enjoyed a rare rally yesterday after better news came from home and overseas.
The global factors were in the form of further rises in the oil price and rising expectations that the United States will delay further rate rises.
Closer to home, investors piled into bank shares, helping the benchmark Straits Times Index surge 1.67 per cent or 43.78 points to 2,657.57.
The banks were back in favour after having been oversold in recent weeks. A good set of results from OCBC also gave the sector a lift.
DBS Group rose 2.1 per cent or 29 cents to $13.89 and OCBC gained 1.8 per cent or 14 cents to $7.92.
Singtel was another winner, up 1.9 per cent or seven cents to $3.76.
A strong Wall Street close overnight, driven by news that US industrial production in January rose by the most in 14 months, did not hurt the mood either.
The 7 per cent jump in the oil price on Wednesday after Iran voiced support for a Russia-Saudi-led move to freeze production boosted crude-related counters.
Keppel Corp was up by 2.3 per cent, or 12 cents, to $5.32 and Ezra Holdings rose 6.1 per cent or 0.3 cent to 5.2 cents.
Commodities counters also got a lift. Noble Group, the most actively traded counter, soared nearly 12 per cent, or four cents, to 37.5 cents, with 135.9 million shares traded, while Golden Agri-Resources gained 1.4 per cent or 0.5 cent to 37 cents on trade of 41.9 million.
"The markets are rallying because of expectations that US rate hikes will be deferred to the end of the year," remisier Alvin Yong said. "But if key US data continues to be strong, then the Fed may have no choice but to raise rates."
St Louis Fed president James Bullard said on Wednesday that it would be "unwise" for the US Federal Reserve to continue hiking interest rates, given declining inflation expectations and recent market volatility.
"Mr Bullard is a well-known hawk, and if he says the Fed may have to reconsider the pace of rate hikes... that spells good news for the market," Mr Yong said.
Meanwhile, premium marble producer Terratech Group plunged nearly 12 per cent or 0.6 cent to 4.5 cents, with 54.4 million shares traded. This came after the firm, a unit of engineering company Tritech Group, announced that the latter is not selling a 29 per cent stake in Terratech.
Last month, Tritech had said it was selling the stake to Chew Hoe Soon, non-executive chairman of SHS Holdings, for $12.5 million.
Terratech said the parties had on Wednesday mutually agreed not to proceed with the disposal.
Sembcorp Marine continued to rebound, rising nearly 5 per cent or eight cents to $1.70, on speculation Temasek Holdings - which owns 49.5 per cent of SembMarine's parent - could take the company private.
Maybank Kim Eng, which maintained a sell call on the stock, warned of a "risk of further mark-downs if market conditions deteriorate further, leading to more contract cancellations or lower asset prices".