RTTNews - The Singapore stock market has finished higher now in back-to-back sessions, collecting more than 35 points or 1.5 percent along the way. The Straits Times Index broke through resistance at 2,350 points, and analysts are forecasting continued upward momentum when the market kicks off trade on Thursday.
The global forecast for the Asian markets is cautiously optimistic, thanks to better than expected economic data and sound corporate news. Strength among the commodities and oil companies are expected to push the regional bourses higher - especially after the European markets finished sharply higher and the U.S. bourses also ended with modest gains.
The STI finished modestly higher on Wednesday, lifted by gains among the financials and the property stocks. For the day, the index gained 19.41 points or 0.83 percent to close at 2,352.55 after trading between 2,319.36 and 2,352.55.
Among the actives, CapitaLand was up 1.1 percent, DBS Group Holdings rose 1.5 percent and Oversea-Chinese Banking Corp was 1.1 percent higher, while City Developments and Keppel Land also ended higher. United Overseas Bank and Singapore Airlines were steady, while Singapore Telecommunications and Frasers Commercial Trust finished lower.
The lead from Wall Street is positive, although stocks were unable to hold onto their strong gains, steadily ceding ground over the course of Wednesday's session after moving sharply higher in morning trading. Nonetheless, the major averages all finished in positive territory amid yet another low volume session.
Early gains came on the heels of a report from the Institute for Supply Management, which said its index of activity in the manufacturing rose to 44.8 in June from 42.8 in May, although a reading below 50 indicates a contraction in the sector. The index came roughly in line with the expectations of economists, who forecast a reading of 44.6.
Separately, housing industry group NAR said its pending home sales index rose 0.1 percent to 90.7 in May from an upwardly revised reading of 90.6 in April. Economists had been expecting the index to come in unchanged compared to the 90.3 originally reported for the previous month.
The day's optimism was mitigated by data from the U.S. Commerce Department revealing that construction spending fell 0.9 percent in May following a revised 0.6 percent increase in the previous month. Economists had expected construction spending to fall by 0.6 percent compared to the 0.8 percent increase that was originally reported for April.
Meanwhile, ADP said that non-farm private employment fell by 473,000 jobs in June following a revised decrease of 485,000 jobs in May. Economists had expected a decrease of 394,000 jobs compared to the loss of 532,000 jobs originally reported for the previous month. While employment fell by more than expected, the decrease in jobs marked the smallest drop since October of 2008, when employment fell by 352,000 jobs.
On the earnings front, General Mills (GIS) reported adjusted fourth-quarter net income of $0.86, up 18 percent from $0.73 in the same period last year. Analysts expected the firm to report earnings of $0.80 per share. Shares of the consumer foods manufacturer climbed by 3.9 percent on the session as traders reacted to the better-than-expected earnings.
The major averages continued to give back ground going into the close but were able to finish in the green by comfortable margins. The Dow closed up by 57.06 points or 0.7 percent at 8,504.06, the NASDAQ rose by 10.68 points or 0.6 percent to 1,845.72 and the S&P 500 advanced by 4.01 points or 0.4 percent to 923.33.
In economic news, Singapore will on Thursday announce PMI figures for June, with forecasts calling for an index score of 51.9, up from 51.2 in May. The electronics PMI is called at 53.4, up from 52.9.
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