Singapore shares snapped a six-day decline after comments from US Federal Reserve chairman Janet Yellen doused fears of an earlier- than-expected interest rate hike in April.
Traders said the rally could also be fuelled by funds window-dressing as the first quarter ends today. The improved sentiment sent the Straits Times Index surging 1.9 per cent or 53.70 points to 2,872.78 as investors piled into banking stocks. UOB soared nearly 3 per cent or 55 cents to $19.05, DBS Group rose 2 per cent or 31 cents to $15.49 and OCBC gained 1.5 per cent or 13 cents to $8.95.
"The likelihood of an April rate hike is now pretty much zero. The market expects the next rate hike in June or July, or possibly later," remisier Alvin Yong said.
Traders have also been focused on China's Purchasing Managers Index data due today, and US non- farm job data tomorrow. "US job data will give signals on whether the rally is sustainable," Mr Yong said.
Meanwhile, some blue chips had a good day, with Singtel up 1.6 per cent or six cents to $3.85. UOB Kay Hian reiterated a buy call on the telco, saying that even if a fourth mobile operator were to disrupt the status quo, Singtel's mobile business here accounts for just 13 per cent of group revenue.
In comparison, StarHub, which was downgraded by the brokerage to a sell, is "susceptible to regulatory risks in Singapore, and its mobile business accounted for 55.6 per cent of its service revenue in the fourth quarter". It added: "StarHub does not have the flexibility to trim cost of content, which is locked in multi-year contracts." The telco was unchanged at $3.31.
Keppel Corp rose 3.3 per cent or 19 cents to $5.97, and Genting Singapore jumped nearly 5 per cent or four cents to 84.5 cents, with 42.8 million shares traded.
Spackman Entertainment was among the most active shares, up 3.7 per cent or 0.5 cent to 14.1 cents, with 105.9 million shares traded.
Noble Group rose 4.5 per cent or two cents to 46.5 cents on trade of 62.2 million shares and Rowsley was up 4.7 per cent or 0.7 cent to 15.5 cents, with 56 million shares changing hands.
News that Sembcorp Industries has signed a 22-year purchase agreement with Myanma Electric Power Enterprise for 225MW of electricity supply sent the stock up 3.4 per cent or 10 cents to $3.08.
RHB, which has a buy call on Sembcorp, said the company is "successfully... focusing on growth in its overseas utilities businesses, especially in power-hungry developing countries like India, China, Myanmar".
Nam Cheong shed 3.5 per cent or 0.4 cent to 11 cents after it said it received notice from Petra Offshore to cancel the sale of an accommodation work barge. But the offshore support vessel builder says the termination is not valid, and could be a breach of contract, for which it is entitled to pursue compensation.