Singapore shares ended higher Friday as investors warmed to signs that major central banks may be planning steps to shore up global liquidity, despite cautiousness over key Greek elections this weekend.
The 30-share Straits Times Index rose 1.3%, or 37.19 points, to 2,811.00, making most of its gains in the afternoon, as European stock markets opened higher, giving a fillip to local stocks. For the week, the index finished 2.7% up.
Investors are hoping that the U.S. Federal Reserve will lower interest rates following signs of weakness in the labor market there. Meanwhile, expectations for coordinated central-bank action to address the European banking crisis were also stoked by a Reuters report Thursday that said monetary authorities are preparing to provide liquidity if the weekend Greek election leads to market chaos.
"People are expecting the central banks to do something," in the event of market turmoil, said Ng Kian Teck, an analyst at SIAS Research. "With European markets opening higher, it helps to bring local markets to a higher level." However, Avis Wang, premium client manager at IG Markets Singapore, said that "today's gains were fuelled by talk of G20 central banks drawing up an action plan for a Greek fallout rather than a genuine shift in sentiment."
CIMB technical analysis tipped near-term resistance for the STI at the 2,800-2,811 levels, with 2,832 as another potential hurdle. "The positive crossover of its (moving average convergence/divergence indicator) could signal that the rebound could continue for a while longer," the house said.
Volume was relatively light, but slightly higher at 1.2 billion shares from 1.02 billion shares Thursday. Gainers outpaced decliners 254 to 119.
Banks advanced amid the upbeat mood, led by Oversea-Chinese Banking Corp.'s 3% climb to S$8.70. DBS Group Holdings moved 1.8% higher to S$13.52, while United Overseas Bank gained 1.6% to close at S$18.00.
Property developers also performed well as investors expect them to benefit from any liquidity boost by central banks. CapitaLand rose 1.9% to S$2.67, its shopping mall unit CapitaMalls Asia was up 2.5% at S$1.46, while peer City Developments added 1.9% to S$10.41.
Other cyclical stocks also gained ground, including commodity counters. Wilmar International rose 2.4% to S$3.49, while Noble Group ended 1.8% higher at S$1.14. Olam International added 1.4% to S$1.825.
Just to share.
Singapore shares market was boosted due to the news major central bank may release more money to rescue global liquidity. This good news can continue its effect if Greece election delivers good result. Greece election acts as a resistant point to global market now. In others words, their election result can slowing down or boosting the global market. I hope they can settle down to create another wave of bulliness to shares market. Lets us pray for them for coming Sunday!
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