The Singapore stock market has lower in two of three sessions since ending the five-day winning streak that saw it collect more than 220 points or 15 percent. The Straits Times Index dipped back below support at 1,750 points, and now analysts are predicting that the market could slide further still at the opening of trade on Monday.
The global forecast for the Asian markets is fairly pessimistic, thanks to downbeat economic data out of the United States and a firmly negative lead from the European and American stock markets. Automobile stocks may be in focus on Monday after reports that Rick Wagoner will step down as General Motors Chairman and CEO in order to secure continued government aid for the embattled American auto maker.
The STI finished modestly lower on Friday, as investors continued to take profits from the recent lengthy winning streak. The financials were hit particularly hard after staging a mild rally in recent sessions.
For the day, the index shed 13.13 points or 0.75 percent to close at 1,745.66 points after trading between 1,729.01 and 1,779.04. Volume was 1,704.4 million shares worth 1,083.0 million Singapore dollars, with losers outnumbering gainers 218 to 211.
Among the actives, CapitaMall Trust was down 7.6 percent, while DBS lost 2.06 percent, United Overseas Bank ended down 3.4 percent, OCBC finished down 2.4 percent and SIA Engineering closed up 4.1 percent.
The lead from Wall Street is decidedly negative as investors cashed in on some of the recent gains, causing weakness to prevail throughout Friday's trading session. Some of the weakness came as investors digested mixed economic news and kept a close eye on a meeting between President Obama and the CEOs of the nation's biggest banks.
The White House has confirmed that Wagoner will step down from his posts at GM, which has posted losses of $82 billion in the past four years and almost ran out of capital towards the end of 2008 before it received an emergency loan from the government. GM has since said that additional funding from the government would be required to continue operations and the Obama administration confirmed on Sunday that an additional loan may be provided - but Wagoner's resignation was a condition of the agreement.
In economic news, the Commerce Department released its report on personal income and spending in February, showing that spending increased for the second consecutive month. Personal spending rose 0.2 percent in February following an upwardly revised 1.0 percent increase in January. The increase was in line with the expectations of economists. Also, personal income edged down 0.2 in February after a downwardly revised 0.2 percent increase in the previous month. Economists had been expecting a slightly more modest 0.1 percent decrease.
The final reading of the Reuters/University of Michigan's consumer sentiment index for March was also released, showing a revised reading of 57.3. Economists had expected the consumer sentiment index to be lifted to 56.8 from the mid-month reading of 56.6.
Meanwhile, President Obama met with the CEOs of the country's biggest banks to discuss the economy and proposals to increase regulation of the financial system. The meeting came only days after the Obama administration revealed details on how they plan to improve the balance sheets of banks. At the close of the roundtable discussion, some of the CEOs mentioned that Obama had emphasized the need to work together to solve the financial crisis and lift the economy out of recession.
The major averages all ended the session firmly in negative territory after ending Thursday's trading at one-month closing highs. The Dow closed down 148.38 points or 1.9 percent at 7,776.18, the Nasdaq closed down 41.80 points or 2.6 percent at 1,545.20 and the S&P 500 closed down 16.92 points or 2 percent at 815.94. Despite the losses on the day, the major averages still closed higher for the third straight week due largely to the rally seen on Monday. The Dow rose 6.8 percent for the week, while the Nasdaq and the S&P 500 posted weekly gains of 6 percent and 6.2 percent, respectively.
In economic news, visitor arrivals into Singapore fell 15.2 percent year-on-year in February to 689,000, the Singapore Tourism Board said on Friday. Visitor days declined 11.6 percent annually to 2.8 million days in the month. The Tourism Board said Indonesia, People's Republic of China, Australia, UK and Malaysia were the top five visiting nations in February.
For comments and feedback: contact email@example.com