SINGAPORE: Singapore shares rose 1.7 percent by midday on Friday led by cyclical stocks such as commodity firm Noble Group , on hopes that Greece would back away from a proposed referendum that threatened its euro zone membership.
At 0500 GMT, the Straits Times Index (STI) was up 1.7 percent, or 47.78 points, at 2,857,82. About 760.4 million shares worth S$701.2 million were traded, compared with 831.5 million shares worth S$649 million that changed hands by the same time on Thursday.
Traders said they expected the STI's gains to be capped at 2,890 for the rest of the session.
"They look like they are abandoning the referendum. I think the market is up more on a relief rally than any real conviction," said Carey Wong, an investment analyst at OCBC Investment Research.
"Because the (trading) volumes on the US weren't fantastic and index futures are flat, this suggests there's more short covering than real buying."
Wong said he expected the STI's gains to taper near current levels, as investors stayed on the sidelines ahead of US non-farm payroll later on Friday and a long weekend in Singapore.
Greek Prime Minister George Papandreou backed away from his referendum proposal that could have derailed last week's long-awaited agreement to cut Greek debt and shore up European banks.
Market sentiment was also given a boost by the European Central Bank's surprise rate cut of 25 basis points on Thursday, the first meeting under new President Mario Draghi.
Department store operator Parkson Retail Asia Ltd jumped as much as 15 percent on hopes it will provide stable earnings in an economic slowdown.
By midday, Parkson Retail shares were 13.7 percent higher at S$1.285 with more than 14.8 million shares changing hands.
"Investors like the defensiveness of its business. They cater to the mid- to lower-end consumers, where spending should be relatively stable unless we see a very bad recession," said a dealer.
Perennial China Retail Trust rose 3.3 percent to S$0.465 after it said it will buy a stake in a shopping mall in China for S$455 million ($357 million).
Palm oil refiner Mewah International Ltd surged 9.4 percent to S$0.465, but the company said it was not aware of any information or possible explanation for the increase in trading volumes.
"Mewah has been way oversold in the past, investors may be picking up the laggards and this has dropped a lot more than the rest of the palm oil firms," said Wong.
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