THERE was very little to distinguish yesterday's session from Tuesday's - the Straits Times Index (STI) rose, the broad market was mixed, volume was low and dealers who decided not to go on vacation spent the whole day wondering if perhaps they had made the wrong decision.

Other features reminiscent not just of Tuesday but also of previous days included a relatively heavier concentration of effort in penny stocks, gains in Jardine stocks which helped the STI to its 17.74 point-rise to 2,841.56 and a dependence on Hong Kong for direction for the entire day.

Initially, this dependence led to a prolonged period of directionless trading as the Hang Seng dropped into negative territory, but this changed once Hong Kong's benchmark bounced in the afternoon to a strong close.

A firm opening for Europe suggested that programme buys were again being used to gain position ahead of a probable rise on Wall Street on Wednesday.

Turnover excluding foreign currency issues was 1.1 billion units worth $960 million - almost identical with Tuesday's volume. Excluding derivatives, there were 174 rises versus 189 falls in the broad market that was also in line with Tuesday.

Unlike Tuesday, however, where the index's main support came from the banks, this time it was commodities firm Noble Group, whose shares rose 13 cents to $3.14 on heavy volume of 30 million shares, adding 4.3 points to the STI.

The buying came after news that Noble has received a bid for sale of its stake in Australia's Gloucester Coal to rival Macarthur Coal in a deal that would see Noble end up owning 24 per cent of Macarthur and A$175 million (S$216 million) in cash.

In assessing the deal, DMG & Partners said it views this positively as Noble will have access to a larger supply of coal for its supply chain business: 'Macarthur's coal sales could reach 7.5 million MT (metric tonnes) per annum. Net profit for FY10 is raised to US$619.9 million from previous US$574.1 million as we factor in one-time gains. Maintain BUY, with target price of $3.36,' said DMG. This represents 16x core FY10 earnings per share, which is the average of four of Noble's peers, including Olam and Wilmar.

Other large index contributions came from the Jardine group's Hongkong Land and Jardine Strategic, whose combined gains added three points, while DBS' 16-cent jump to $14.98 accounted for another three points.

As for what next year might have in store, S&P said in a Dec 21 article that it expects incremental improvement in macroeconomic fundamentals, ongoing repair in the financial sector, and a cautious revival in the non-financial sector.

'Nevertheless, we expect some potholes on the road to the 'new normal',' cautioned Diane Vazza, head of Standard & Poor's global fixed income research group. 'For example, we think there will be bursts of volatility, particularly in the second half of the year as some of the emergency government support provisions approach their expiration date. In fact, we would not be surprised to see a partial retreat from 2009's strong rally in risky asset values.'

Given that much of the improvement stemmed from unconventional government policy measures, the private sector's effectiveness in taking over the reins from government as the primary engine of growth for the world economy remains a critical determinant of 2010's outlook, said S&P.