RTTNews - The Singapore stock market alternated positive and negative finishes all of last week to ultimately end little changed, ticking cumulatively higher by just a single point over the past five trading days. The Straits Times Index has hovered around the 2,550-point plateau for the past week, but now analysts are looking for more substantial gains at the opening of trade on Monday.
The global forecast for the Asian markets is positive, thanks to better than expected economic news out of the United States. Housing stocks are expected to see strength for a change on Monday, while resource stocks also are tipped higher. The European and U.S. markets saw sharp gains on Friday, and now the Asian markets are forecast to extend those gains.
The STI finished modestly lower on Friday, as the financial stocks fell under heavy selling pressure throughout the session. Industrials, airlines and telecoms also finished lower.
For the day, the index shed 14.71 points or 0.65 percent to finish at 2,544.86 after trading between 2,532.33 and 2,570.66. Volume was 2.53 billion shares worth 1.51 billion Singapore dollars. There were 250 decliners and 221 gainers, with 891 stocks finishing unchanged.
Among the decliners, DBS, United Overseas Bank, Oversea-Chinese Banking Corp, Singapore Telecom, Singapore Airlines, Keppel Corp and Singapore Press Holdings all finished modestly lower.
The lead from Wall Street is firmly optimistic as stocks saw a notably strong outing on Friday, with early buying interested spearheaded by better than expected existing home sales data and relatively optimistic economic commentary from Federal Reserve Chairman Ben Bernanke. The major averages all rose by substantial margins on the day, extending their winning streak for the fourth straight session.
Friday's rally was largely sparked a report from the National Association of Realtors showing that existing home sales increased by much more than expected in the month of July, with the headline figure rising for the fourth consecutive month. Existing home sales rose 7.2 percent to an annual rate of 5.24 million units in July from a 4.89 million unit rate in June. Economists had been expecting a more modest increase to a 5.0 million unit rate. The increase in sales was the largest monthly gain on record for the total existing-home sales series dating back to 1999. With the increase, existing home sales rose for the fourth consecutive month, the first four-month winning streak since June of 2004.
The markets also looked to remarks from Federal Reserve Chairman Ben Bernanke, who spoke about the recent financial crisis and the near-term economic outlook at the Kansas City Fed's annual conference in Jackson Hole, Wyoming. The Fed chief said, Economic activity appears to be leveling out, both in the United States and abroad, adding that the prospects for a return to growth in the near term appear good. However, Bernanke warned that the recovery might be sluggish at first, with unemployment declining only gradually from high levels.
On the earnings front, Gap Inc. (GPS), Ann Taylor Stores (ANN) and J. M. Smucker Company (SJM) reported earnings that beat Wall Street estimates on the bottom line.
The major averages were rangebound for much of the afternoon, although they reached new highs for the session in the final hour of trading. The Dow closed up by 155.91 points or 1.7 percent at 9,505.96, the NASDAQ climbed by 31.68 points or 1.6 percent to 2,020.90 and the S&P 500 rose by 18.76 points or 1.9 percent to 1,026.13. With the four-day winning streak, the major averages all closed notably higher for the week, ending the session at multi-month closing highs. The Dow advanced by 2 percent, the NASDAQ moved up by 1.8 percent and the S&P 500 posted a gain of 2.2 percent.
In economic news, Singapore will on Monday provide consumer price index data for July. Forecasts call for a 0.3 percent increase on year after the 0.5 percent annual decline in June.
Also, the Singapore Department of Statistics on Friday said domestic wholesale trade grew 7.3 percent sequentially in the second quarter, following a revised 10 percent fall in the first quarter. The sequential increase was mainly attributable to petroleum and petroleum product sector, general wholesale trade and chemicals and chemical products sectors.
On an annual basis, domestic wholesale trade plunged 28.1 percent in the second quarter. After adjusting for price changes, domestic wholesale trade volume recorded an annual growth of 3.2 percent.
Further, the report showed that foreign wholesale trade grew 6.7 percent in the second quarter compared to first quarter with most major sectors recording higher sales. Meanwhile, foreign wholesale trade dropped 31.6 percent from the second quarter of 2008.
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