RTTNews - The winning streak ground to a halt on Thursday for the Singapore stock market after it gained nearly 150 points or 8 percent along the way. The Straits Times Index is clinging to support at 2,200 points, although investors are anticipating another day of selling pressure when the market opens for business on Friday.

The global forecast for the Asian markets is pessimistic, with the financial shares expected to come under pressure after it was announced that Britain's AAA credit rating might be in jeopardy. Downbeat economic data reinforces the negative sentiment. The European markets finished sharply lower, as did the U.S. markets - and the Asian bourses are also predicted to take a hit.

The STI finished sharply lower on Thursday, as investors locked in gains from the recent rally. Financials led the decliners, while properties, airlines and industrials also ended in the red.

For the day, the index lost 58.27 points or 2.57 percent to close at 2,210.97 after trading between 2,210.97 and 2,261.37. Volume was 2.56 billion shares worth 1.87 billion Singapore dollars. There were 392 decliners and 169 gainers, with 735 stocks finishing unchanged.

Among the decliners, DBS, United Overseas Bank, Oversea-Chinese Banking Corp, CapitaLand, City Developments, Keppel Land, Singapore Airlines, Singapore Telecommunications, SembCorp Industries and Yanlord Land all finished in the red.

Wall Street offers a negative lead as stocks finished Thursday's session significantly lower after mild losses in the previous session. The major averages all closed in firmly negative territory as trader optimism dampened following the release of largely disappointing economic data.

The retreat came on the heels of another uninspiring jobs report from the U.S Labor Department for the week ended May 16. The data showed that first time jobless claims slowed but continuing claims rose for yet another week, reaching a new historic high. Meanwhile, the Philadelphia Federal Reserve's business activity index for the first half of May showed improvement but rose by less than expected, further mitigating risk appetite.

Some of the pessimism was moderated by forward looking indicators for April from the Conference Board, which came in slightly better than expected, raising some economic prospects for the coming months.

The broad-based losses on the day came as traders did some profit taking following the recent run-up seen in equities. In addition, with no considerable news on tap for Friday's session and markets closed on Monday for Memorial Day, equity markets worldwide saw considerable pullbacks.

The major averages opened notably lower following the jobs report and lingered in negative territory throughout the day, before finishing just off of their daily lows. Subsequently, the Dow closed down by 129.91 points or 1.54 percent to finish at 8292.13, the NASDAQ finished down by 32.59 points or 1.89 percent to end at 1695.25, and the S&P 500 also fell, closing down by 15.14 points or 1.68 percent to finish at 888.33.

In economic news, the Singapore economy shrank a seasonally adjusted 14.6 percent in the first three months of 2009 compared to the previous quarter, the Ministry of Trade and Industry said on Thursday in its revised report.

That was at the lower end of analyst expectations that had predicted a decline of between 17 and 14 percent on quarter. The preliminary reading in April had reported a 19.7 percent quarterly decline following a 16.4 percent decline in the fourth quarter of 2008.

On an annualized basis, GDP was down 10.1 percent, better than forecasts that had called for a decline of 10.9 percent after the preliminary figure showed a contraction of 11.5 percent.

Also, Statistics Singapore said the domestic wholesale trade declined a seasonally adjusted 11 percent sequentially in the first quarter, slower than a 29.1 percent drop in the fourth quarter. After removing the price effects, the domestic wholesale trade was down 2.4 percent in the first quarter compared to a 2.9 percent fall in the fourth quarter.

Year-on-year, the wholesale trade at current prices dipped 34.5 percent in the first quarter, much faster than a 23 percent decline in the preceding quarter. At constant prices, the wholesale trade fell 6.8 percent compared to a 5.4 percent decline in the fourth quarter.

Meanwhile, the foreign wholesale trade declined a seasonally adjusted 10.5 percent in the first quarter compared to the fourth quarter, and after adjusting for price effects was down 1.9 percent. On a yearly basis, the foreign wholesale trade dropped 36 percent at current prices and fell 9.7 percent at constant prices in the first quarter.

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