Singapore shares rose by midday on Wednesday, after China's manufacturing sector showed fresh signs of bottoming out in April and strong US factory activity data raised hopes that the global economy was still on track for a recovery.
The benchmark Straits Times Index (STI) rose 0.52 per cent to 2,994.00, holding above key resistance at the 50-day moving average around 2,986.
"The markets have been holding up today. China's HSBC PMI came in slightly better than the last number we saw," said Ng Kian Teck, lead analyst at SIAS Research.
However, he said he expects the STI to remain rangebound ahead of US non-farm payrolls data due on Friday.
Shares of DBS Group Holdings Ltd climbed as much as 1.5 per cent to a five-week high, as investors warmed to the stock following its stronger-than-expected quarterly earnings last week.
Upcoming Indonesian rules that may jeopardise DBS Group's US$7.3 billion (S$9.1 billion) bid to take over Bank Danamon also helped sentiment as it lessened the risk of DBS becoming bogged down in a drawn-out, messy acquisition and consolidation process.
DBS rose to an intraday high of S$14.17, a level not seen since the announcement of the Danamon deal last month caused the shares to plunge.
"The Danamon deal is still subjective. The market seems to be taking the probability that it may not go through in a positive way," said Ng.
US factory activity grew in April at the strongest rate in 10 months, with the Institute for Supply Management's index rising to 54.8 from 53.4 in March, easing worries the economy had lost momentum at the start of the second quarter.
The HSBC China Purchasing Managers' Index, which is geared towards smaller firms, improved to 49.3 in April from 48.3 in March.