RTTNews - The Singapore stock market has alternated between positive and negative finishes over the last five trading days since ending the modest two-day winning streak in which it had collected 90 points or 4 percent on its way to its highest closing level so far this year. That steak may end on Tuesday as analysts are expecting the Straits Times Index to ease for the second consecutive session - perhaps testing support at 2,300 points.
The global forecast for the Asian markets calls for a mild decline - more on inertia than anything else after a round of profit taking took hold on Monday. The lack of economic data or other stimuli may result in thin trade, which could exaggerate movement. The European markets ended sharply lower, and the U.S. bourses ended nearly unchanged, and the Asian markets are tipped to fall right in between with modest declines.
The STI finished sharply lower on Monday, thanks to heavy selling pressure among the shipbuilding and property sectors. For the day, the index lost 62.65 points or 2.6 percent to close at 2,333.70 after trading between 2,321.41 and 2,417.25. Volume was 3.59 billion shares, with 509 decliners and 127 gainers.
Among the decliners, CapitaLand shed 3.6 percent, while City Developments lost 6.7 percent, Keppel Corp dropped 4.1 percent, SembCorp Marine was 5.4 percent lower, DBS Group Holdings fell 3.4 percent, COSCO Corp shed 5.6 percent and Golden Agri Resources fell 4.4 percent.
The lead from Wall Street is virtually flat as stocks finished Monday's session little changed after traders went bargain hunting in the afternoon following a morning sell-off. The major averages finished on opposite sides of the unchanged line but only by minuscule margins. The lack of significant movement came as the day's session was marred by low volume and a lull in economic data. Traders did some profit taking early on but were enticed back into the market following some speculation about a near-term economic recovery.
In the news, the annual Apple Worldwide Developers Conference kicked off in San Francisco, with Apple (AAPL) announcing a new web browser, a remodeled MacBook and a fresh version of the iPhone. Also, Chrysler's sale of assets to Fiat was be delayed by the U.S Supreme Court. A group of Indiana pension funds have filed an emergency appeal with the court to block the sale.
Packaged food supplier General Mills (GIS) was also in focus after the company said it is on track to exceed its prior earnings targets for the fiscal year ending May 31, 2009 due to good operating performance and a lower fourth-quarter tax rate. The forecast, however, assumes no mark-to-market valuation as well as gains from asset sales. The company also provided its initial segmental sales outlook for 2010. The stock rose by 4.0 percent on the day, setting its best closing level in over three months.
The Federal Reserve continued its treasury buyback program Monday, completing the first of two quantitative easing moves for the week. The New York Fed purchased $7.50 billion worth of securities with maturity dates ranging from December of 2013 to April of 2016.
The day's buyback saw a total of $29.97 billion in treasuries submitted for the purchase. Overall, the Fed has purchased a total of $153.02 billion since the program began on March 25. Some speculation has risen as to whether the Fed will raise interest rates to combat the effects of expected inflation following its quantitative easing actions.
Meanwhile, President Barack Obama is ramping up the economic stimulus spending, pledging to create over 600,000 jobs this summer. Obama made the announcement Monday morning, stating that he will accelerate the implementation of the $787 billion stimulus in the next 100 days.
The major averages closed little changed after the day's losses were largely offset by a late session rally. While the Dow finished up by 1.36 or less than a tenth of a percent at 8,764.49, the NASDAQ dipped by 7.02 or 0.4 percent to 1842.40, and the S&P 500 fell 0.95 or 0.1 percent to 939.14.
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