Singapore share prices closed 2.73 percent higher on Monday as investors bet the Federal Reserve will be able to keep the United States out of a recession, dealers said. The Straits Times Index gained 96.80 points to 3,639.02.
Volume traded totalled 2.29 billion shares worth 2.61 billion Singapore dollars (1.74 billion US). There were 544 rising issues, 244 losers and 842 unchanged. The Federal Reserve cut key interest rates by a sharp 50 basis points last week and investors are hopeful another cut will come in October.
"Although the Federal Reserve tried to suggest that it has a neutral bias about future interest rate moves, it will probably have to cut US interest rates again before the year is out," Henderson Global Investors said.
"Financial markets are betting that the Federal Reserve, helped by strong overseas growth, will be successful in keeping the US economy out of recession. This is our view too, though the risk of failure should not be ignored," it said.
Among banks, DBS Group finished 70 cents higher at 20.90 dollars, Oversea-Chinese Banking Corp was 20 cents up at 8.85 and United Overseas Bank added 30 cents to 21.70.
For the blue chips, Singapore Airlines added 10 cents to 18.80, Singapore Telecommunications rose eight cents to 3.80 and ST Engineering was steady at 3.74. Property stocks bounced back after last week's losses. CapitaLand was up 20 cents at 8.20 while City Developments gained 20 cents to 16.30.
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