Straits Times Index rises 1% after US Federal Reserves allays rate hike fears

Local shares rose 1 per cent on Thursday as investors bet that interest rates would be kept low in the light of expected slow global economic growth. -- PHOTO: ST FILE
Local shares rose 1 per cent on Thursday as investors bet that interest rates would be kept low in the light of expected slow global economic growth. -- PHOTO: ST FILE

SINGAPORE - Local shares rose 1 per cent on Thursday as investors bet that interest rates would be kept low in the light of expected slow global economic growth.

The benchmark Straits Times Index climbed 32.54 points, or 1 per cent, to end the day at 3,259.25.

About 1.17 billion shares changed hands, worth $982.7 million in total.

The most active counter was Mirach Energy, which gained 0.6 cent or 3.6 per cent to 17.1 cents on 69.3 million shares traded.

Analysts said that the optimism was mainly due to the outcome of the United States Federal Reserve's latest policy meeting, which suggests that the Fed may keep interest rates low for a longer time than expected due to weaker global economic growth.

The Fed meeting minutes prompted a Wall Street rally, with the Dow Jones Industrial Average rising 1.6 per cent, the S&P 500 climbing 1.7 per cent and the Nasdaq jumping 1.9 per cent.

"Minutes of the September Fed meeting acted like a steroid," Mr Matthew Sherwood, head of investment markets research at Perpetual Ltd in Sydney told Bloomberg.

They "seemed to suggest that US rates could remain highly accommodative for longer than initially expected if global demand remained weaker than expected", he said.