SINGAPORE - Investor confidence returned on Thursday, sending Singapore shares up 2.52 per cent, spurred by a rally on Wall Street, fresh Chinese stimulus, and suggestions of further delay in the Fed rate lift-off.
The key Straits Times Index soared 72.43 points or 2.52 per cent to 2,945.43, as bargain hunters piled into blue-chip constituents. Banking counters led the charge, with OCBC gaining 3.2 per cent or 28 cents to S$9.17; DBS up 2.5 per cent or 44 cents to S$18.09; UOB rose 2 per cent or 39 cents to S$19.75. Jardine Matheson jumped 4.8 per cent or US$2.24 to US$48.75.
"Those who dared to buy since Black Monday would have made good profit (on Thursday). Those who had wanted to sell and hold cash, changed their minds when sentiment changed. But we cautioned them to pace their bargain hunting," remisier Alvin Yong said.
But he cautioned that to convincingly break the downtrend, the STI has to close above 3,000 resistance level with strong volume.
Meanwhile, Shanghai jumped 5.4 per cent, reclaiming the critical 3,000 level as after China announced it injected 140 billion yuan via a short-term liquidity operation and would further cut benchmark interest rates and reserve requirement ratios. Hopes that stamp duties on stock trading will drop led to sharp gains in Chinese financial-related stocks, including banks, brokerages, and insurers.
The markets were also cheered by suggestions from Mr William Dudley, head of the New York branch of the Federal Reserve, that a much-anticipated September rate hike could be delayed by the market turmoil. Traders are also on the lookout for signals from the Jackson Hole economic summit, particularly from the Fed.
A better-than-expected official US manufacturing report showing orders for durable goods jumped 2 per cent in July also added to the optimism.
"The STI reclaimed the 2,900 level and was last seen testing the resistance at 2,950. As long as the markets in the US and China continues to improve in the coming days, we should also see a nice recovery in Singapore," IG market strategist Bernard Aw said.
Meanwhile, shares of Olam International spiked up 13.4 per cent or 22.5 cents to $1.91 yesterday, before the company called for a trading halt. No further details were provided.
Fellow commodity trader Noble Group soared 14.4 per cent or 6.5 cents to 51.5 cents, with 137.4 million shares traded. The counter was the most actively traded yesterday, fuelled by speculation that Olam's announcement may benefit Noble as well, Mr Aw said.
Also actively traded is software solutions provider Silverlake Axis, which jumped 19.6 per cent or nine cents to 55 cents, with 61 million shares traded.