Singapore share prices surged 6.12 percent on Monday, mirroring sharp gains in regional bourses after the US Federal Reserve cut its discount rate to ease credit fears, dealers said. The Straits Timex Index closed 191.67 points higher at 3,322.38 on volume of 2.54 billion shares worth 3.26 billion Singapore dollars (2.14 billion US) and winning issues outpaced losers 883 to 125 while 594 stocks were even.
"While the US credit market crisis may not disappear overnight, the Fed's decision to cut the discount rate by 50 basis points has demonstrated their will to act and help reduce the uncertainty and volatility in the event that credit markets deteriorate further," DBS Vickers said in a note to clients.
"This should calm equity markets and end the indiscriminate selling." Henderson Global Investors said further moves may be required by the Federal Reserve given the size of the problem in the US markets and its possible impact on the rest of the world.
"The actions by the Fed on Friday were a first step in addressing these issues and the markets reacted positively. However, given the potential scale of the problems, further interventions by the Fed may be necessary," the asset management firm said.
Investors' mood were also lifted by Prime Minister Lee Hsien Loong's comments that Singapore can expect to enjoy sustained annual average growth of 4.0 to 6.0 percent for the next five to 10 years if it continued to adapt to the changing external environment.
Among banks, United Overseas Bank rose 1.30 dollars to 21.20, Oversea-Chinese Banking Corp was 55 cents higher at 8.60 dollars and DBS Group added 1.80 dollars to 21.30.
In the property sector, CapitaLand jumped 45 cents to 6.85 dollars, City Developments was up 90 cents at 14.60 dollars and Keppel Land advanced 35 cents to 7.90 dollars. For the blue chips, Singapore Airlines rose one dollar to 17.90 dollars and Singapore Telecommunications added eight cents to 3.48 dollars.