SINGAPORE - Singapore shares snapped a six-day fall on positive sentiment after dovish comments from United States Federal Reserve chair Janet Yellen doused fears of an earlier than expected rate hike in April.
Traders say the rally could also be fuelled by quarter or month-end window dressing that culminates on Thursday.
The Straits Times Index surged 1.9 per cent or 53.70 points to 2,872.78 as investors piled into banking counters. UOB soared nearly 3 per cent or 55 cents to S$19.05; DBS Group jumped 2 per cent or 31 cents to S$15.49; and OCBC gained 1.5 per cent or 13 cents to S$8.95. Keppel Corp rose 3.3 per cent or 19 cents to S$5.97, while Genting Singapore jumped nearly 5 per cent or four cents to 84.5 cents, with 42.8 million shares traded.
"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. "The rally is a reaction to Yellen's reminder that the rate hike is data dependent, and not what the FOMC members say."
Next on traders' radar is China's Purchasing Managers Index data today and US nonfarm payrolls tomorrow. "US jobs data will give signals on whether the rally is sustainable," Mr Yong said.
Also driving up the index is Singtel, which rose 1.6 per cent or six cents to $3.85. UOB KayHian 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 in Singapore accounts for just 13 per cent of group revenue.
In comparison, StarHub, which got 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."
"StarHub does not have the flexibility to trim cost of content, which is locked in multi-year contracts," it added. The telco is unchanged at S$3.31.
Among the most actively traded is Spackman Entertainment, which jumped 3.7 per cent or 0.5 cents to 14.1 cents, with 105.9 million shares traded; Noble Group rose 4.5 per cent or two cents to 46.5 cents, with 62.2 million shares traded. Rowsley was up 4.7 per cent or 0.7 cents to 15.5 cents, with 56 million shares traded.