One day after ending the four-day winning streak in which it collected more than 120 points or 6.5 percent en route to a fresh eight-month high, the Singapore stock market turned right back to the upside. The Straits Times Index remained below resistance at 1,900 points, but investors are hopeful that the market can climb that hill at the opening of trade on Monday.
The global forecast for the Asian markets is virtually flat. Corporate earnings are a mixed bag so far as some have come in better than expected - although more of the big financials are due to report this week and could fall under pressure. The European markets finished sharply higher and the U.S. markets ended barely in the green, and the Asian bourses are predicted to fall somewhere in between with modest gains.
The STI finished slightly higher on Friday, thanks to mixed trading among the financials, properties and blue chips.
For the day, the index added 4.81 points or 0.25 percent to close at 1,896.56 after trading between 1,888.99 and 1,931.05. Volume was 2.0 billion shares worth 1.12 billion Singapore dollars. There were 262 decliners and 232 gainers, with 702 stocks finishing unchanged.
Among the gainers, DBS Group was up 0.5 percent and telecom firm SingTel added 0.8 percent, while United Overseas Bank and Keppel Land also finished higher. Finishing lower were Oversea-Chinese Banking Corp, CapitaLand, City Developments, Singapore Airlines and Neptune Orient Lines.
Wall Street offers little in the way of guidance with perhaps a touch of upside as stocks ended Friday's trading modestly higher after a relatively lackluster session with traders digesting the latest batch of earnings news. The major averages ended the day just above the unchanged line but still managed close higher for the sixth consecutive week.
Earlier in the day, General Electric (GE) released its first quarter financial results, reporting earnings from continuing operations of $0.26 per share, down from $0.43 per share in the previous year. On average, analysts expected the company to report earnings of $0.21 per share.
Citigroup (C) also released its first quarter results, reporting a loss available to common shareholders that shrank significantly to $0.18 per share from $1.03 per share in the year ago quarter. Analysts expected the company to report a loss of $0.34 per share.
In other corporate news, General Motors (GM) CEO Fritz Henderson said it was more probable that the auto giant would need to seek bankruptcy protection in order to complete its restructuring process, although he noted that isn't the company's preferred option.
Meanwhile, on the economic front, the Reuters/University of Michigan's consumer sentiment index for April rose to 61.9, a substantial increase from the previous reading. Analysts had expected the index to rise to 58.5 from 57.3 in March.
Also, Federal Reserve Chairman Ben Bernanke delivered a speech earlier in the day in which he offered his support to financial innovation, despite the fact that some of these new products have contributed to the current economic crisis. Bernanke argued that increased regulation would be a better response than eliminating innovation. The Fed chief noted that while financial innovation can misfire, more often the benefits outweigh the downside.
The major averages moved to the downside going into the close, ending the day modestly higher. The Dow closed up 5.90 points or 0.1 percent at 8,131.33, the NASDAQ closed up 2.63 points or 0.2 percent at 1,673.07 and the S&P 500 closed up 4.30 points or 0.5 percent at 869.60. Friday's modest gains helped the major averages to post their sixth straight week of gains. While the Dow rose 0.6 percent for the week, the NASDAQ and the S&P 500 posted weekly gains of 1.2 percent and 1.5 percent, respectively.
In economic news, Fitch Ratings on Friday maintained Singapore's long-term foreign and local currency Issuer Default Rating at 'AAA' giving a stable outlook to the ratings. At the same time, the firm confirmed the country's short-term foreign currency IDR at 'F1+' and the country ceiling at 'AAA', giving both these ratings also a stable outlook.
Vincent Ho, Associate Director of Fitch's Asian operations said, Singapore's sovereign creditworthiness is underpinned by its strong external finances, solid public finances, stable political situation and flexible government policies. The country's public finances are structurally strong despite the current cyclical weakening amid the adverse effects of the global economic recession.
Fitch said that despite Singapore having a high gross external debt to GDP ratio of 306 percent in 2009, the country's net external credit position remained very strong and better than the 'AAA' median.
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