The Singapore stock market has finished higher now in three straight sessions, collecting nearly 220 points or 11.4 percent in the process. The Straits Times Index closed above the 2,000-point plateau for the first time in six months, and now analysts are looking for the market to continue to climb at the opening of trade on Tuesday.
The global forecast for the Asian markets continues to be uniformly positive, with forecasts calling for extended gains throughout the region. Better than expected corporate results and economic data from the United States provide positive sentiment, with financials and commodities expected to continue to rise. The European and U.S. markets ended sharply higher, and the Asian bourses are predicted to follow suit - although some profit taking could take place.
The STI finished sharply higher on Monday, supported broadly by the financial stocks and property issues. Commodities also finished higher, while weakness among the telecoms limited the market's upside.
For the day, the index surged 108.43 points or 5.6 percent to close at 2,028.71 after trading between 1,930.60 and 2,039.39. Volume was 2.82 billion shares, with 446 gainers and 128 decliners.
Among the gainers, DBS gained 10.5 percent, while Oversea-Chinese Banking Corp ended 10.0 percent higher, United Overseas Bank finished up 11.3 percent, City Developments gained 12.7 percent, CapitaLand rose 7.6 percent, SembCorp Marine finished 15.6 percent higher, Keppel Corp. rose 4.7 percent, Olam International rose 13 percent, Noble Group ended 10.8 percent higher and Golden Agri Resources climbed 10.8 percent.
The lead from Wall Street is broadly positive as stocks moved sharply higher during trade on Monday, with traders reacting to the release of some better than expected economic data. The major averages extended the upward move seen last week, rising to multi-month closing highs. The strength in the markets came as the better than expected data generated some optimism about the outlook for the economy, particularly a recovery in the beleaguered housing market.
A report from the National Association of Realtors showed a significant increase in pending home sales, an indicator of future housing market activity. The increase came as many first-time buyers are taking advantage of historically good housing affordability conditions. The report showed that NAR's pending home sales index rose 3.2 percent in March following a revised 2.0 percent increase in February. Economists had expected the index to come in unchanged following the 2.1 percent increase originally reported for the previous month.
Separately, the Commerce Department released a report showing an unexpected increase in construction spending, which rose 0.3 percent in March following a 1.0 percent decrease in February. Economists had expected spending to fall by about 1.6 percent.
On the corporate front, shares of Sprint Nextel (S) turned in a strong performance after the telecom giant reported a wider first quarter loss compared to the year-ago period but reported an unexpected adjusted profit. Sprint Nextel reported a net loss for the quarter of $594 million or $0.21 per share compared to a loss of $505 million or $0.18 per share in the year-ago quarter. Excluding items, the company earned $0.03 per share compared to analyst estimates of a loss of $0.05 per share.
In other news, President Barack Obama discussed his administration's efforts to close tax loopholes in remarks Monday, pledging that his administration is working to reform the tax system and crack down on illegal overseas tax evasion. Obama said his administration's efforts to crack down on offshore tax evasion, which he called the largest tax scam in the world, would raised $210 billion over the next ten years.
The major averages saw some further upside going into the close, ending the session at or near their best levels of the day. The Dow closed up 214.33 points or 2.6 percent at 8,426.74, the NASDAQ closed up 44.36 points or 2.6 percent at 1,763.56 and the S&P 500 closed up 29.72 points or 3.4 percent at 907.24. With the gains, the NASDAQ ended the session at its best closing level in six-months, while the Dow and the S&P 500 set nearly four-month closing highs. The upward move also lifted the S&P 500 above the unchanged line for the year-to-date period.
In economic news, Singapore will on Tuesday announce its purchasing managers' index for April, with forecasts calling for a score of 49.2 - up from 47.1 a month earlier. The electronics PMI is called at 49.7, also gaining after a score of 48.8 in the previous month.
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