STI rises for second day as local stocks rally despite global uncertainties

SINGAPORE - Local stocks continued to rally in the face of uncertainties on Wednesday, after Greece officially defaulted on its debt while waiting its referendum this weekend that may decide whether the country will stay in the Eurozone.

Investors may have priced in the shock from Greece in the previous selloff, market watchers said, as Wall Street also gained after a volatile day, with Dow Jones Industrial Index up 0.13 per cent.

Taking cue from overseas gains, the benchmark Straits Times Index (STI) rose for the second day, closing 13.81 points or 0.42 per cent up to 3,331.14. It rose as much as 0.7 per cent in the early trading hours to 3,340 before the momentum slowed down, but the index still held firm above 3,320.

Remisier Desmond Leong said: "The market has been stronger than expected, which is a bit of a surprise as I expected more kneejerk reaction. This could mean that the markets have priced in the shock from the Greek debt crisis."

Blue chips were the dominant force on the market, with Singapore Exchange gaining the most. The bourse closed 35 cents or 4.47 per cent up at S$8.18, with over 7 million shares changing hands.

SGX was questioned by the Monetary Authority of Singapore for unusual price and volume movement, but the bourse said it was not aware of any reason. But SGX will stay under the focus in the coming days as the investment community awaits the arrival of SGX new chief executive Loh Boon Chye.

Property plays CapitaLand and City Developments also gained. CapitaLand closed four cents or 1.14 per cent up at S$3.54, while City Developments rose nine cents or 0.92 per cent to S$9.87.

In its note last week, OCBC Investment Research maintained its buy rating for CapitaLand, which recently announced that it has met the conditions to acquire Danga Bay A2 Island in Iskandar, Johor, giving the group a meaningful foothold in the region over the long term.

Outside the STI, IT play Yuuzoo closed 0.5 cent or 1.96 per cent up at 26 cents. It was among the most active counters yesterday, when over 26 million shares changed hands.

Noble Group was also among the top active counters. Over 27 million shares were traded, as the commodity play dropped 0.5 cent or 0.66 per cent to 75.5 cents - one of yesterday's top losers.

whwong@sph.com.sg