Singapore share prices are expected to extend their gains on expectations the US Federal Reserve will ease monetary policy by cutting interest rates to spur the economy, dealers said on Friday.
For the week ended September 14, the Straits Times Index rose 47.43 points or 1.36 percent to settle at 3,536.40. Average daily volume totalled 2.40 billion shares worth 2.14 billion Singapore dollars (1.42 billion US), compared with 2.19 billion shares valued at 1.87 billion dollars the previous week.
Concerns about a slowing US economy have unsettled investors in recent weeks and the recent surge in crude oil prices is likely to drag further on consumer spending.
Analysts say a cut in interest rates would help the United States avoid a recession, which is likely to weigh down the global economy if it happens.
A reduction in US interest rates is expected to result in lower mortgage rates other parts of the world, including in Singapore, and would boost the real estate sector, analysts said.
"All eyes will be on the Fed meeting next week," said DBS Vickers Securities retail strategist Yeo Kee Yan.
Fraser Securities research head Najeeb Jarhom remains upbeat on local shares despite the continuing fallout from a crisis in the US subprime credit market.
"On the home front, earnings are unlikely to be much impacted by the subprime woes as evidenced by the current rally towards the close of the third quarter," he said.