INVESTORS showed they were determined to end on a high note in what has been a wild year by sending the market to a 16-month high yesterday.

Banks and property counters were the stars on the last full day of business as traders dressed up their prices for one last final time.

It all helped to send the Straits Times Index (STI) up 10 points to 2,879.76, bringing the total gains for the year to 63.5 per cent - a highly unlikely outcome 12 months ago.

The buoyant mood also got hearts beating faster that the first week of the new year might be one to celebrate.

Memories went back to 2007 when then STI hurled towards the 3,000 level in the first week of trading after an upsurge of liquidity flooded the region.

Step by step, stocks are gaining strength on the back of the fairly upbeat economic outlook around the region and a slew of positive data on housing prices and consumer confidence coming out of the United States.

The market is in the final countdown to the new year. Blue chips are essentially trading in a tight range as fund managers have closed their books for this year.

But trading activities on the broad market turned a tad livelier yesterday, as investors snapped up penny stocks in the hope that the new year would kick off on an upbeat note. A heavier-than-usual 1.76 billion shares worth $1.13 billion changed hands.

There was still a considerable amount of last-minute window-dressing, even as the holiday approached.

United Overseas Bank gained 22 cents to $19.68, OCBC rose four cents to $9.08 while property giant City Developments was up five cents at $4.20.

Even the prospect of higher fuel prices failed to dampen the exuberance in transport counters. SMRT Corp rose six cents to $1.92 after BNP Paribas raised its rating to 'buy' from 'hold', citing growth prospects for the company's rental and advertising businesses.

Singapore Airlines climbed 18 cents to $14.88, with traders anticipating more balmy business conditions for the carrier with a pick-up in air travel next year.

The impending flotation of Tiger Airways, whose biggest shareholder is SIA, was another vote of confidence for better business prospects ahead.

But there is one cloud over the sector in the form of the bankruptcy worries surrounding Japan Airlines. Its worsening situation dragged Tokyo's Nikkei-225 Index down by 0.86 per cent on its final trading day of the year yesterday.

Meanwhile, Nissan car distributor Tan Chong International jumped 11 Hong Kong cents to HK$1.43 on a relatively high volume of 564,000 shares, being the latest counter to benefit from a dressing-up in price before the year closes.

Even some dividend plays enjoyed buying interest. Tonics maker Cerebos Pacific, which is due to make a 25 cent payout in February, rose six cents to $4.23.

But Genting Singapore fell two cents to $1.26 on a hefty volume of 104 million shares, as profit-taking set in after two days of gains, which had taken the counter 9.4 per cent higher.

Traders were anticipating the business it might attract with the opening of its Sentosa casino resort.

engyeow@sph.com.sg