TRADERS were all but wearing Santa Claus suits yesterday as they embraced the Christmas mood and sent the market to a 17-month high.

Funds, too, got in the act by window- dressing blue chips to make the last full trading day before the holiday a festive one. The result was a 17.74-point rise in the benchmark Straits Times Index (STI) to 2,841.56.

But it would not be Christmas without the presence of Scrooge in the guise of traders who spotted superficial parallels with the last-minute run-ups in the STI at the end of 1993 and 1999 - just before a sharp correction in January.

In 1993, the STI had experienced one of its biggest bull runs in history as global markets celebrated the end of a drought on Wall Street caused by a slowdown in the United States.

The 1999 boom came as the region started shaking off the trauma inflicted by the Asian financial crisis.

But other traders believe 2010 will be benign. Some pointed to the final days of 2006 as a better precedent. The STI then was on a roller-coaster that changed to a fresh rally, taking it to an all-time high of 3,831.19 the following October.

'I hope that January 2010 will break the vicious circle of markets suffering a big reversal, after the huge binge in December,' said remisier James Chen.

Traders, intoxicated by the prospects that markets might enjoy another good year, snapped up more banking shares yesterday in anticipation of a further rise in the STI.

This sent DBS Group Holdings up 16 cents to $14.98 and United Overseas Bank 12 cents higher to $19.44. But OCBC succumbed to profit-taking and fell two cents to $8.92 after climbing 26 cents on Tuesday.

Some property counters also enjoyed a dress-up in their prices as the final countdown to the New Year started.

Beverage giant Fraser & Neave, which has a huge property portfolio, rose five cents to $4.15, while CapitaLand gained one cent to $4.16 and Hongkong Land gained nine US cents to US$4.77.

Stocks that have featured in recent corporate actions were also in the limelight.

Commodities supply chain manager Noble Group rose 13 cents to $3.14 after structuring a deal to give itself 24 per cent of Australia's Macarthur Coal by giving up control over Gloucester Coal and two other non-listed mining assets.

Traders viewed Noble's move as giving the firm access to a larger supply of coal, the price of which might go up in tandem with the increase in demand for energy from the booming regional economies.

On the broad market, overall volume stayed above the one-billion-share level, despite the quiet pre-Christmas trading.

Abalone producer Oceanus Group fell 0.5 cent to 38.5 cents on volume of 64.9 million shares, with profit-taking setting in. It said Taiwanese regulators have given it the go-ahead to list its shares in the form of depository receipts in Taipei.

Fertiliser firm China XLX lost 3.5 cents to 57.5 cents, with 15.4 million shares traded. The counter has fallen 25 per cent since hitting a year-high of 77 cents two weeks ago when its shares started trading in Hong Kong as well.

engyeow@sph.com.sg