Singapore rallied along with other key Asian markets yesterday after strong jobs data in the United States at the weekend gave investors more clarity on interest rates and the economic outlook.
The benchmark Straits Times Index rose 21.87 points or 0.76 per cent to 2,900.92, reflecting gains in other major markets in the region.
Shanghai was up 0.34 per cent, Tokyo put on 0.99 per cent, Kuala Lumpur rose 0.25 per cent and Jakarta closed up 0.29 per cent. But Hong Kong pared 0.15 per cent after a volatile session.
The regional gains were expected after the cue from Wall Street, where the Dow Jones Industrial Average rose 2.12 per cent last Friday, its biggest jump in three months.
This followed the news that US non-farm payrolls grew more than expected last month, further confirming that the US Federal Reserve is set to hike rates this month and finally end market jitters.
But investors in Asia will also be keeping their eyes on China this week, when the world's second-largest economy releases data on its industrial production and retail sales. Market watchers such as Barclays senior economist Leong Wai Ho are not expecting great news.
"There are two different stories. While the US looks to be a growth driver, I believe this week we will continue to see that persistent softness in the Chinese economy, and we are calling for a 7 per cent year-on-year drop for November exports," Mr Leong said.
"The regional equities will not see any firm rebound towards the year end as a result. We will not see a collapse, but sentiments will remain subdued."
Reflecting that cautious stance, trading volumes here were slow, with only 875.7 million shares worth $696.8 million changing hands. Still, there was enough lift to push 22 counters on the STI higher, with Jardine Cycle & Carriage gaining the most among the blue chips, up $1.15 or 3.27 per cent to $36.35.
The company was issued a "trade with caution" warning by the Singapore Exchange last Thursday over a similar surge that it could not explain.
Genting Singapore rose two cents or 2.6 per cent to 79 cents, while Keppel Corp staved off pressure from slumping oil prices to gain eight cents or 1.23 per cent to $6.57. But Noble Group, another blue chip firm with exposure to energy prices, was the STI's top loser, falling one cent or 2.44 per cent to 40 cents.
Outside the STI, engineering firm Terratech Group rose strongly for the second straight day, up 0.9 cent or 19.15 per cent to 5.6 cents. The stock is up 124 per cent in just two sessions after Terratech hit its full-year low at 2.5 cents last Thursday.
The SGX issued a "trade with caution" warning after the company told the bourse that it was not aware of the reasons behind the red-hot performance.