The Singapore stock market has ended higher now in consecutive sessions, collecting more than 90 points or 5 percent in the process en route to an eight-month high. The Straits Times Index broke through resistance at 1,875 points, although analysts are predicting a mild retreat on Tuesday with the release of GDP data that is expected to be grim.
The global forecast for the Asian markets is mixed, since several bourses around the world have been closed in the wake of the Easter holiday and have to play some catch-up. Uninspired corporate earnings news continues to weigh on investors, although there remains some optimism over the impending recovery of the global economy. The European markets were mostly closed, while the U.S. markets were mixed flat - and the Asian bourses are projected to also remain close to the unchanged line.
The STI finished sharply higher on Monday, with financials leading the surge. For the day, the index jumped 48.26 points or 2.6 percent to close at 1,876.77 after trading between 1,862.38 and 1,880.59. Volume was 1.38 billion shares, with gainers outnumbering decliners 350 to 139.
Among the gainers, Neptune Orient Lines shares finished 8.5 percent higher, while DBS Group was up 3.82 percent, United Overseas Bank added 2.67 percent and Oversea-Chinese Banking Corp climbed 4.21 percent.
Wall Street offers a fairly flat lead as stocks staged a notable recovery attempt over the course of the afternoon after seeing considerable weakness in morning trading on Monday. The major averages moved well off their worst levels of the day, eventually ending the session mixed. The early weakness came as traders cashed in on recent gains amid some uncertainty about the impending earnings season, with financial giants Citigroup (C), JP Morgan (JPM), and Goldman Sachs (GS) among the companies that are due to release their quarterly results this week.
Boeing (BA) contributed to the anxiety about the outlook for earnings, with the aerospace giant saying that its first quarter earnings would be negatively impacted by decisions to reduce airplane production as well as unfavorable price escalation.
Some selling pressure was also generated by a report from the New York Times that said the Treasury Department is directing General Motors (GM) to prepare for a bankruptcy filing by June 1. The report specified that one plan under consideration would create a new company that would buy the good assets of the company almost immediately after the carmaker files for bankruptcy.
Nonetheless, the late day recovery was due in part to news that the Obama administration plans to ease certain restrictions on transactions with Cuba, including allowing U.S. telecom companies to apply for licenses in the island nation. Some buying interest was also generated by an announcement that President Barack Obama will deliver a major speech on the economy at Georgetown University on Tuesday.
The White House said that the president would discuss how each step his administration has taken to confront this economic crisis fits within his broader vision of how we move this economy from recession to recovery and ultimately to prosperity.
Earlier in the day, President Obama marked the 2,000th transportation project to be approved under the $787 billion economic relief package. The government effort is coming in ahead of schedule and under budget, Obama announced, praising the efforts of Transportation Secretary Ray LaHood and Vice President Joe Biden.
While the major averages all moved into positive territory in late day trading, the Dow slipped back into the red going into the close. The Dow closed down 25.57 points or 0.3 percent at 8,057.81, while the NASDAQ closed up 0.77 points or 0.1 percent at 1,653.31 and the S&P 500 closed up 2.17 points or 0.3 percent at 858.73.
In economic news, Singapore is on Tuesday scheduled to release preliminary gross domestic product numbers for the first quarter of 2008. Analysts are expecting the Singapore economy to contract 9 percent compared to the previous quarter after the 16.9 percent decline in the previous three months. On an annual basis, GDP is expected to ease 8.9 percent after the 3.7 percent fall a quarter earlier. The Monetary Authority of Singapore will also issue its semiannual policy statement at the same time.
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