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STOCKS here started the week and the new month on a buoyant note yesterday, as shares in commodity-related firms surged.
The Straits Times Index (STI) finished 50.99 points, or 2.2 per cent, higher at 2,380.07, after rising as much as 2.6 per cent earlier in the day.
A strong end to trading in the US last Friday and ongoing hopes that the worst impact from the collapse in worldwide demand is over gave equity markets in the region an added boost.
Here, property developers, banks and other stocks with broad exposure to the economy propelled the gains in the STI.
CapitaLand rose 5.5 per cent to $4.01, while rival property company City Developments finished 3.7 per cent higher at $9.80.
Other heavyweight stocks pushing the index higher were DBS Group, which rose 2.5 per cent to $12.10, Singapore Exchange, which gained 5.6 per cent to end at $7.76, and OCBC Bank, which finished 2.1 per cent higher at $7.39.
Olam International, which supplies agricultural commodities worldwide, saw the biggest percentage gain among the STI members, after Temasek Holdings agreed to buy a 13.8 per cent stake in the company for $437.5 million. Olam's shares jumped 11.3 per cent to close at $2.16.
Other stocks closely linked to the commodities trade also gained. Hong Kong-based Noble Group, which manages global supply chains in food, energy and metals, rose 7.6 per cent to $1.70, while shipping group Cosco Corp ended 7.8 per cent higher at $1.38.
Last Friday, the Reuters/Jefferies CRB index, a global benchmark for commodity prices, ended at its highest since Nov 10 last year. The index, which tracks 19 commodities including aluminium, crude oil, gold and soya beans, rose 13.8 per cent last month on hopes that the economic recession worldwide may be shorter and less severe than previously feared.
Yesterday, the price of benchmark oil futures contracts rose to more than US$68 a barrel in early trading in New York. Oil prices rose 30 per cent last month alone, and some analysts are predicting that they could soon reach US$75 a barrel.
Of the STI's 30 component stocks, 27 rose while just two fell and one finished unchanged.
Telecommunications rivals SingTel and StarHub were the two stocks weighing the index down. SingTel fell 2.7 per cent to $2.93, while StarHub ended 0.5 per cent lower at $2.19.
A Sydney-based analyst at Macquarie Research, Andrew Levy, downgraded his rating on SingTel from 'outperform' to 'neutral', citing increasing risks to its investment in India's Bharti Group, doubts about the pace of recovery in sales at Indonesian associate Telkomsel, and the recent sharp gains in SingTel's share price.
Beyond the STI, sentiment in the broader market was also bullish. Rising counters outnumbered losers 422-73, with 357 counters unchanged, excluding warrants and bonds.
Trading volume was heavy - some 3.53 billion units worth $2.45 billion changed hands, compared to Friday's three billion units worth $2.64 billion. That includes warrants and bonds but excludes shares traded in foreign currencies.
Among the busiest counters was offshore marine support services firm Swiber Holdings, which said last Friday that it planned to raise a net $71.8 million in general working capital from a private share placement. Swiber's share price ended 5.2 per cent lower at 99.5 cents, with 146.6 million shares changing hands.
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