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STOCKS here and elsewhere in the region rebounded yesterday after US Federal Reserve policymakers boosted hopes that the worst may be over for the world's biggest economy. The Straits Times Index (STI) finished 42.87 points or 1.7 per cent higher at 2,614.18, recouping the losses it suffered on Wednesday.
Earlier yesterday, the index rose as much as 2.4 per cent following overnight gains by major US equity indices. The Fed said on Wednesday at the end of its two-day meeting that the information it has received since its previous policy meeting in June 'suggests that economic activity is levelling out'.
It added that it plans to keep interest rates 'exceptionally low' for an 'extended period' to support economic recovery. The news sent equity prices in the US higher, as investors bet on ongoing improvements in the economic outlook there - a mood that spread to the Asian markets when they opened.
Here, stocks closely linked to the commodities trade were the biggest percentage gainers among STI members yesterday.
Palm oil firm Golden Agri-Resources rose the most in percentage terms, ending 7.4 per cent up at 51 cents - its highest close since Sept 2 last year. It was also the most heavily traded counter in the overall market, with 208.4 million shares changing hands.
Wilmar International, the other major palm oil group in the STI, jumped 7 per cent to finish at $6.58 - the highest since it listed here in August 2006 through a reverse takeover of Ezyhealth Asia Pacific.
At yesterday's closing price, Wilmar had a market capitalisation of $42.02 billion - second only to telco SingTel's $50.65 billion and well in excess of the market values of the Singapore-listed banks and major property developers.
Olam International, a supplier of agricultural commodities worldwide, gained 5.8 per cent to end at $2.55. Outside the STI, Indofood Agri Resources, another large palm oil producer, rose 5.6 per cent to $1.88 - the highest since July 23 last year.
Yesterday's rebound was also evident in the broader market. The FTSE ST All-Share index, which tracks 263 of the most liquid stocks here, ended the day 1.7 per cent higher, matching the STI's gains, with 166 of its members rising and 39 falling. Of the STI's 30 component stocks, 21 rose while seven fell and two ended unchanged.
In the overall market, losing counters outnumbered gainers 367- 105 with 394 unchanged. That excludes warrants and bonds, whose prices sometimes move in the opposite direction of a company's share price. Eleven of the 13 FTSE ST industry sector indices rose, while two fell.
The consumer goods index, which tracks 40 stocks including Wilmar, Indofood Agri and Olam, was by far the biggest gainer, ending 6.2 per cent higher.
The FTSE ST China index, which tracks China stocks listed here, climbed 2.7 per cent, with 35 of its 51 members rising, as stocks listed in Shanghai and Shenzhen recovered from the steep losses suffered on Wednesday. The FTSE ST Catalist index, which tracks stocks listed on the junior board here, rose 3.3 per cent.
Trading volume in the overall market was the highest so far this week, with 2.86 billion units worth $2.2 billion changing hands, compared with 2.33 billion units worth $1.89 billion on Wednesday, excluding shares traded in foreign currencies.
Elsewhere in the region, most major equity indices also rose, reversing Wednesday's losses. Hong Kong's Hang Seng Index gained 2.1 per cent to end at 20,861.30, while Japan's Nikkei-225 index finished 0.8 per cent higher at 10,517.19.
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