RTTNews - The losing streak has hit five sessions for the Singapore stock market, which has lost nearly 120 points or 5.2 percent in the process. The Straits Times Index is holding on to support at 2,270 points, although analysts say the market could slide through that plateau at the opening of trade on Thursday.
The global forecast for the Asian markets is flat with a touch of downside. Financials are expected to be in focus following the Obama administration's proposed financial system reforms. Technology shares may provide a bit of support, as might the commodities after some heavy selling in recent sessions. The European markets finished sharply lower and the American bourses ended virtually flat, and the Asian markets are projected to fall right in between with modest declines.
The STI finished modestly lower on Wednesday, as the financials and the airlines fell under heavy selling pressure throughout the session. For the day, the index was down 16.71 points or 0.73 percent to close at 2,271.45 after trading between 2,255.33 and 2,296.59.
Among the decliners, DBS Group fell 1.4 percent, Singapore Telecommunications lost 0.7 percent, Axiata Group slid 2.2 percent and Astro All Asia eased 2.7 percent, while Oversea-Chinese Banking Corp, City Developments, Singapore Airlines and Neptune Orient Lines also ended in the red.
Wall Street offers little in the way of guidance with perhaps a slight negative bias as the major averages finishing on opposite sides of the unchanged line on Wednesday following two days of steep losses. The lack of conviction came amid low volume and mixed trader sentiment regarding near-term economic prospects and proposed financial system reforms from the Obama administration.
Seeking to prevent a recurrence of the financial meltdown that sunk the U.S. economy into a recession, President Barack Obama laid out a sweeping agenda for regulatory reform earlier this afternoon. The president proposed granting the Federal Reserve the authority to scrutinize firms that are large enough to pose a systemic risk to the financial markets.
In addition, Obama called for the creation of an oversight council of existing federal regulators to share information, identify gaps in regulation and tackle issues that don't fit neatly into an organizational chart. Obama also called for the creation of a new agency dedicated to looking out for the interests of consumers in the financial markets.
Earlier, traders digested a report on consumer prices from the Labor Department that showed a modest increase in the month of May, with the mild price growth coming in below the expectations of economists. The report showed that prices edged up 0.1 percent in May after coming in unchanged in April. Economists had been expecting a somewhat more substantial increase in prices of about 0.3 percent.
Core consumer prices, which exclude food and energy prices, also edged up 0.1 percent in May following a 0.3 percent increase in April. The modest increase in core prices came in line with economist estimates.
In other news, the Federal Reserve continued its treasury buyback program Wednesday, completing its second quantitative easing move of the week. The New York Federal Reserve purchased $7.0 billion worth of securities with maturity dates ranging from May of 2016 to May of 2019. The day's buyback saw a total of $26.2 billion in treasuries submitted for the purchase. Overall, the Fed has purchased a total of $169.97 billion since the program began on March 25th.
The major averages ended the session mixed, largely unable to hold onto their earlier gains. While the NASDAQ finished higher by 11.88 points or 0.7 percent at 1,808.06, the Dow slid 7.49 points or 0.1 percent to 8,497.18 and the S&P 500 dropped by 1.26 points or 0.1 percent to 910.71.
In economic news, non-oil domestic exports or NODX dropped 12 percent year-on-year in May, slower than a 19 percent drop in the preceding month, the International Enterprise Singapore said on Wednesday. Economists expected a fall of 11.7 percent.
Electronic NODX contracted 22 percent annually in May, following a 26 percent decline in April. Non-electronic NODX was down 5.6 percent, after a 15 percent fall in the previous month. On a monthly basis, the NODX rose 5.6 percent in May, reversing a 1.4 percent fall in April, owing to higher electronics and non-electronic NODX.
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