THE Straits Times Index (STI) rebounded 53.7 points or 1.9 per cent to 2,872.78 on Wednesday, the penultimate day of the first quarter.
Two reasons could be found for the gain which came after two days of losses that saw the index lose 29 points - comments made by US Federal Reserve chair Janet Yellen that reinforced the notion that bad economic news would be good for stocks, and early quarter-ending window-dressing. On this latter point, with the STI now only 10 points in the red for 2016, another push to take it into the black on Thursday is probable.
Banks were the largest index gainers, followed by several other stocks such as Keppel Corp, Genting Singapore and Global Logistic Properties. Turnover amounted to 1.4 billion units worth S$1.2 billion; excluding warrants, there were 291 rises versus 125 falls.
In the offshore and marine sector, Keppel rose S$0.19 to S$5.97 on volume of 5.4 million.
Maybank Kim Eng (MKE) in a March 30 report urged investors to sell into strength as the broker believes the bounce from the S$4.71 low has been driven purely because oil has bounced.
"This is unsustainable as rig building fundamentals have not improved and EPS (earnings per share) is likely to be subjected to further consensus downgrades in FY16," said MKE, adding that an oil price rebound to a US$40-US$50 per barrel level this time round is unlikely to be sufficient to generate confidence for new rig orders and the industry also has to deal with a rig supply glut.