A sharp rebound in Singtel and the local banking counters helped Singapore stocks rally by 1.7 per cent yesterday.
The upswing, after five straight sessions of losses, came as investors dial back expectations of a September rate hike following a disappointing August employment report in the United States.
The Straits Times Index rallied 47.82 points to 2,851.74, led by Singtel, which rebounded 2.1 per cent, or eight cents, to $3.95 after at least two brokerages noted that the telco will be the least affected among the three incumbents by the entry of a fourth provider because of its diversified revenue base.
One broker said Friday's telco sell-off was overdone as the "Singapore mobile business contributes only 5 per cent to Singtel's valuation".
Banks enjoyed much-needed respite from a recent sell-off, with DBS Group Holdings jumping 1.5 per cent, or 22 cents, to $15.25. OCBC climbed 1.4 per cent, or 12 cents, to $8.71 as United Overseas Bank rose 1.4 per cent, or 26 cents, to $18.26.
Property counters also rallied on dimming prospects of a September rate hike, with CapitaLand jumping 2.9 per cent, or nine cents, to $3.16, and City Developments climbing 4.4 per cent, or 38 cents, to $8.96.
US non-farm payrolls increased just 151,000 last month, underperforming Wall Street forecasts of a gain of 180,000 in August.
As expectations for a rate hike diminish, a dealer noted that those taking "bearish bets will unwind some of those positions, giving the market a short-term bounce".
At home, penny stocks were again the most actively traded. Short-covering drove up Noble Group by 11.6 per cent, or 1.3 cents, to 12.5 cents, with 229.6 million shares done. Cedar Strategic surged 50 per cent, or 0.1 cent, to 0.3 cent, with 166.2 million shares traded.
Oil and gas plays Ezion Holdings and Ezra Holdings rebounded after Brent jumped more than 5 per cent to trade above US$49 a barrel on initial hopes that Saudi Arabia and Russia may agree on an output cap. But oil pared gains after their announcement didn't deliver as much as investors had anticipated.
Ezra jumped 7.7 per cent, or 0.3 cent, to 4.2 cents, with 40.7 million shares traded. Ezion jumped 6.4 per cent, or 1.5 cents, to 25 cents with 31.6 million shares traded.
OCBC Investment Research, which has a neutral call on the oil and gas sector, said companies have been taking more proactive measures to manage their debt obligations in the wake of Swiber Holdings' collapse.
Mencast announced a banking facility with UOB to obtain funds for a $50 million bond maturing this month, while ASL Marine has proposed a rights issue to raise up to $25 million in net proceeds.
United Industrial Corp was hit with a query from the Singapore Exchange over unusual price movements. The stock fell 1.4 per cent, or four cents, to $2.72.