Wall Street optimism after Mr Joe Biden was confirmed as the next United States president sent local shares soaring yesterday in line with major gains across the region.
The Straits Times Index (STI) shot up 86.22 points or 2.97 per cent to 2,993.19, taking it close to the psychological support of 3,000 once again. Investors are hoping that Mr Biden's confirmation will mean more stimulus spending to help the US economy overcome its pandemic-induced downturn.
Japan's Nikkei 225 gained 2.36 per cent, Malaysian stocks added 1.89 per cent and the Hang Seng Index in Hong Kong gained 1.2 per cent. Only the Shanghai Composite Index retreated, falling 0.17 per cent.
Another reason for the STI's surge could be related to its heavy composition of financial stocks.
The STI has risen 5.3 per cent this week. Around 2.55 billion shares worth $2.13 billion changed hands yesterday, with gainers outnumbering losers 321 to 202.
Top index performer DBS added 5.26 per cent to $27.42 - near its last peak of $27.50 in March 2018 - amid a banking stock rally.
City Developments was the worst performer and the only decliner, extending its week-long losses as it fell 2.65 per cent to $7.35 over boardroom departures. This was despite executive chairman Kwek Leng Beng's attempt to defend recent appointments to the board.
Axi chief global market strategist Stephen Innes said monetary stimulus as well as high savings rates have created the perfect conditions for speculation and asset price lift-off.
"And when adding the benefit that investors will no longer be held hostage to the previous White House confusion on policy, it is no wonder the Street is still popping the New Year champagne, basking in the afterglow of the rally party, which is looking to extend."
