WALL Street's Tuesday rally helped push the Straits Times Index (STI) up 16.43 points to 2,766.66 on Wednesday, part of a region-wide bounce that saw the Hang Seng Index gain 2.7 per cent and the Nikkei 1.6 per cent.
Turnover, however, was a weak one billion units worth S$794 million and gains were not as widespread as the index's rise would suggest - excluding warrants, there were 228 rises against 165 falls throughout the whole market. Of the dollar volume done, S$528 million or 66 per cent came from trading in the STI's components.
US markets rose on Tuesday, supposedly after the release of better-than-expected housing numbers which were said to give rise to the view that the economy there is strong enough to withstand the series of interest rate hikes that the Federal Reserve is envisaging.
Also helping was a rise in oil prices - in February, the price fell below US$30 per barrel; on Tuesday, it closed in on US$50.
Here, a 60-point rise in the Dow futures on Wednesday helped keep prices firm, though the STI did finish 24 points below its intraday high of 2,790.
Given the market's low liquidity, the afternoon decline in the index and the absence of retail business, dealers were understandably downbeat when asked about trading. "Short covering'' was the favoured reason for the index's rise.