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Singapore stocks rise 5.6 percent to 6-month high

Singapore stocks rise 5.6 percent to 6-month high

Singapore stocks jumped to a six-month high Monday on growing investor optimism that the worst of the global economic downturn may be over.
The Straits Times index rose 108.43, or 5.6 percent, to 2,028.71. The stock market was closed Friday for the Labor Day holiday.
Bank shares helped lead the index higher, with Singapore's three biggest banks surging on expectations earnings may fall less than previously expected.
DBS Group Holdings rose 10.5 percent, United Overseas Bank gained 10 percent, and OCBC bank jumped 11.3 percent. Property developers also rose, with City Developments up 12.7 percent and CapitaLand gaining 7.6 percent.
"We are positive on Singapore banks, with DBS and UOB our top picks," Citigroup said in a research report. "We view the first quarter to be the quarter of worst GDP contraction and that systemic risks in U.S./global banks may have receded."
Citigroup expects the Straits Times index to rise to 2,400 within the next 12 months.
The global recession has hit Singapore especially hard, with the country's key sectors _ trade, finance and tourism _ all reeling. The economy shrank 11.5 percent in the first quarter from a year ago, the biggest contraction since independence in 1965.