Banks continue to lead STI gains

AT the risk of sounding like a broken record, this week's main play as far as blue chips were concerned was the banks, their prices driven by the logic that higher interest rates mean wider net interest margins and therefore earnings.

So it was that their biggest jump came on Thursday following the release of the minutes of the September US Federal Open Market Committee meeting at which several Fed members said they thought the economy was strong enough to withstand a third rate hike this year, widely expected in December. In the federal funds futures market, the probability of this occurring has jumped from 70 to 77 per cent.

On Friday though, a reversal in one of the banks saw the Straits Times Index finish a net 16.02 points, or 0.49 per cent higher at 3,319.11, bringing its gains for the week to 27.82 points or 0.85 per cent. Turnover has hovered around S$1 billion daily for more months than brokers would care to remember. On Friday, volume figures were over two billion units worth S$1.3 billion. Excluding warrants, the advance-decline score was 271 to 183.