RTTNews - After alternating positive and negative finishes last week and holding in a fairly tight range, the Singapore stock market finally broke to the upside on Monday. The Straits Times Index closed above the 2,600-point plateau for the first time in more than a week, although investors anticipate that the market could dip back below that level by the opening of trade on Tuesday.
The global forecast for the Asian markets provides little in the way of guidance as weakness among the financials and retail stocks is expected to be offset by gains among the oil and steel shares. The European markets finished on a positive note, while the U.S. markets ended little changed - and the Asian markets also are likely to trade in mixed fashion but may fall prey to profit taking following strong rallies on Monday.
The STI finished sharply higher on Monday, benefitting from solid gains among the financials and the property stocks.
For the day, the index surged 67.47 points or 2.65 percent to close at 2,612.33 after trading between 2,586.36 and 2,616.28.
Among the gainers, CapitaLand added 3 percent, DBS Group was up 2.1 percent, Genting Singapore gained 3 percent and United Overseas Bank jumped 3 percent, while Singapore Airlines and Singapore Telecommunications also finished higher.
The lead from Wall Street is virtually flat with perhaps a touch of downside as stocks moved back to the downside over the course of the trading session on Monday, ending the day nearly unchanged after seeing some early strength. The major averages closed on opposite sides of the unchanged mark.
This morning, traders reacted to comments from a number of central bankers over the weekend at the Federal Reserve conference in Jackson Hole, Wyoming, indicating that interest rates are likely to remain fixed for some time despite some signs of economic stabilization. At the conference, Federal Reserve Chairman Ben Bernanke said, Economic activity appears to be leveling out, both in the United States and abroad. Bernanke also noted that the prospects for a return to growth in the near term appear good.
However, the optimism was partly offset by comments from economist Nouriel Roubini, who said that he sees a big risk of a double recession in an article for the Financial Times. Roubini, who predicted the magnitude of the recent financial crisis, stated that the global economy might bottom out in the second half of the year and that the economies in the U.S and other European countries might witness anemic or below trend growth for at least a couple of years.
The pullback by the markets was also partly due to comments from Sun Trust (SIT) CEO James Wells, who said that financial institutions are likely to incur further losses amid the dismal condition of the commercial real estate market.
In other news, conflicting reports have led to speculation over the health of Bernard Madoff, perpetrator of the largest Ponzi scheme in history, who may be dying of cancer at a federal prison in North Carolina. However, prison officials have refuted the cancer claim that a number of media outlets reported earlier.
The major averages saw choppy movement in late session dealing, resulting in a mixed close to kick off the week. While the Dow closed up by 3.32 points or less than a tenth of a percent at 9,509.28, the NASDAQ slipped by 2.92 points or 0.1 percent to 2,017.98 and the S&P 500 fell by 0.56 or 0.1 percent to 1,025.57.
In economic news, Singapore consumer prices fell for the fourth straight month in July on lower housing and transport costs, data from the Department of Statistics showed on Monday. The consumer price index or CPI decreased 0.5 percent year-on-year in July, marking the same pace of decline as in the preceding month. On a monthly basis, consumer prices increased 1.1 percent in July, after falling 0.5 percent in June.
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