Singapore blue chips were up 0.42 percent at the close on Wednesday, buoyed by a rebound in recently battered technology stocks such as Chartered Semiconductor Manufacturing.
The Straits Times index rose 7.91 points to end trade at 1,873.17. Overall, gainers led losers 221 to 110, in brisk turnover of 534 million shares.
The market gave a muted response to the Monetary Authority of Singapore's 2003/04 annual report that said the pace of economic expansion could moderate in the second half of this year, after three straight quarters of strong double-digit growth.
Singapore Airlines was among the top index movers, gaining 10 Singapore cents to S$10.80, as crude oil futures came off their recent highs above $42 a barrel.
But dealers said gains were capped in the transport sector as oil markets were still quite volatile on worries over supply.
Dealers said a positive lead from the United States and fall in oil prices from recent highs helped sentiment, a day after the market traded its weakest levels in over a week.
Wall Street had a string of good results and Federal Reserve chief Alan Greenspan made upbeat comments about the US economy on Tuesday.
The US is among export-driven Singapore's largest markets.
Chartered Semiconductor rose 5.3 percent to S$1.20, recovering from 11-month lows hit on Tuesday. It was still down some 14 percent this month.
The recovery in the technology sector pushed up index-heavy financial shares such as DBS Group and OCBC Bank. Downstream electronics-related stocks such as ST Assembly and Venture Corp Ltd were also buoyed. On Tuesday, Venture hit a two-month low of S$16.10 and ST Assembly saw its lowest in 15 months.
Technology stocks had taken a hit in recent sessions amid downbeat forecasts by their US peers and downgrades by major brokers of the semiconductor sector.
Dealers said the technology sector fall was probably overdone.
"The tech cycle is peaking which is different from a slowdown and will not be as negative to exports and growth as some people think," said a strategist at a US brokerage.
Dealers said MAS's forecast of moderate growth in the second half had already been priced in by the market.
Economists have mostly revised their forecasts for full-year growth to above the government's forecast of 5.5 percent to 7.5 percent, which would mark the best growth in four years.
SembCorp Marine Ltd, Southeast Asia's largest shipyard group, said it had bought a 30 percent stake in China's largest ship repair company for about S$49 million.
Its shares, however, eased about one percent to S$1.01, after the announcement.