Oil-related stocks lead STI's rebound

AFTER having plunged 110 points on Monday and Tuesday, the Straits Times Index managed a 12.14-point bounce to 3,227.23 on Wednesday thanks mainly to a sudden rebound in oil-related stocks such as Keppel Corp and Sembcorp Marine.

This was attributed to short-covering ahead of a likely bounce in Western markets, where one likely trigger for a rise could be the US Federal Reserve's Open Market Committee meeting where clues on the future of interest rates are expected.

In particular, markets are watching to see if the Fed retains or drops the phrase "for a considerable time" as applied to the period that interest rates would remain depressed after the Fed ended its QE stimulus in October. If the phrase is retained, markets are expected to rally as it means rates will not be raised soon.