Singapore shares rose by midday on Thursday on improving risk appetite after U.S. stocks recorded their best session in a month, with oil rig builder Keppel Corp (KPLM.SI) among the gainers on stronger-than-expected first quarter net profit.

By the midday break, the Straits Times Index (STI) <.FTSTI> was up 0.97%, or 30.61 points, at 3,196.41. The total value of shares traded in the morning session was S$1.12 billion, around 53% higher than $732.6 million on Wednesday.

Local traders said there is limited upside to the STI in the afternoon, but support is likely to be at around 3,180 points.

 

“Right now it’s more of a spillover from the strong performance at Wall Street. The longer term trend is still poised upwards and my view is for a much stronger STI,” said Phua Ming-weii, an analyst at Phillip Securities. 

 

Commenting on the surge in gold prices, he said: “Gold is a safe haven asset, but at the same time it’s seen as a way to hedge against inflation. At this point, risk appetite is coming back so it’s certainly not a sign of risk aversion.”

 

Shares of Keppel Corp (KPLM.SI), the world’s largest rig-builder, rose as much as 1.6% after posting a 7.8% rise in quarterly net profit, helped by better margins from its offshore and marine business.

 

The firm also said that new orders for oil rigs had rebounded. At midday, Keppel Corp shares were trading at $12.92 on a volume of 4.3 million shares.

 

Several brokers reiterated their buy calls on Keppel Corp on expectations of more orders for rigs, but RBS downgraded the stock to hold from buy as it believed that increased orders and better margins have already been priced in.