Asian stocks made a solid comeback yesterday, taking their cue from positive data in the United States.
The Straits Times Index (STI), in line with the regionwide rally, climbed 16.43 points, or 0.6 per cent, to 2,766.66.
Data which showed that the Singapore economy expanded modestly during the first quarter likely put a dampener on sentiment, while trade agency IE Enterprise Singapore slashed export forecasts for the year amid a weaker trade outlook.
Wall Street rode high on confidence on Tuesday, jumping 1.22 per cent following a report that April new-home sales surged to their highest in more than eight years.
This helped offset fears over impending interest rate hikes, with the next expected to come into play as soon as next month.
"Strong US new home sales have added credence to the Fed's claims that the US economy may be strong enough for another rate hike in June or July," Mr Angus Nicholson, a Melbourne-based market analyst at IG, told Bloomberg.
In Asia, Hong Kong surged 2.71 per cent, Tokyo grew 1.57 per cent, and Sydney put on 1.45 per cent.
Shanghai was an anomaly, slipping 0.23 per cent on yuan depreciation worries given the stronger greenback.
The three local lenders helped lift the STI yesterday, with DBS Group Holdings up 15 cents or 1 per cent to $15.31.
OCBC Bank advanced seven cents or 0.8 per cent to $8.47, while United Overseas Bank grew 12 cents or 0.7 per cent to $18.03.
The oil-and-gas-related plays also fared well as crude prices inched higher to levels of US$50 a barrel. Keppel Corporation rose four cents or 0.8 per cent to $5.27. Sembcorp Industries grew two cents or 0.7 per cent to $2.76, while its rig-building arm Sembcorp Marine was unchanged at $1.54.
Both SembMarine and Keppel said they have not been served with papers related to a reported damages suit by fund manager EIG Management against Petrobras, in response to a Reuters report that said EIG had also named SembMarine, Jurong Shipyard and Keppel in the suit.
Singapore Airlines jumped 17 cents or 1.6 per cent to $10.67, while Singtel edged up one cent or 0.3 per cent to $3.82.
Commodity trader Noble Group, which was flat at 30.5 cents, came up as the day's most heavily traded stock, with a turnover of some 83.6 million shares.
Other actives included P99 Holdings, which surged 3.1 cents or 64.6 per cent to 7.9 cents. The company on Tuesday announced plans to diversify into property development and the manufacture of construction materials.
It has signed a letter of intent with Chip Eng Seng, which will subscribe for 505 million new shares.
A total of 1.05 billion shares worth $793.7 million changed hands across the bourse.