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Singapore shares close 1.7% higher after dovish US jobs report

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A 90-POINT rise in the Dow futures and a 1.65 per cent surge in Hong Kong's Hang Seng Index helped the Straits Times Index (STI) kick off the week with a 47.82 points or 1.7 per cent jump to 2,851.74.

The gains were led by the banks and Singapore Telecommunications (Singtel) - of the S$933 million total value traded, some S$605 million or 65 per cent was done in the 30 STI components. Excluding warrants, there were 278 rises versus 133 falls.

The trigger for traders to cover their short positions came with the release of a weak US jobs report for August, a timely reminder that bad economic news is still good for stocks as it lessens the need for higher interest rates.

In the federal funds futures market, the implied probability that the US central bank will raise rates at this month's meeting fell from 24 per cent on Thursday to 21 per cent on Friday.

In the property sector, shares of United Industrial Corp traded at an intraday low of S$2.50 before ending a net S$0.04 lower at S$2.72 on volume of 544,800, drawing a noon query from Singapore Exchange. The company had not responded before the end of trading.

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Elsewhere, Maybank Kim Eng in its Sept 5 report on telcos, titled "Three's A Crowd, Four Is Worse", said it has downgraded M1 from "hold" to "sell" and StarHub from to "buy" to "hold" while Singtel remains a "hold" after the Infocomm Development Authority of Singapore received three bids for the fourth telco licence.

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