The Singapore stock market has finished higher now in consecutive sessions, gathering nearly 30 points or 1.4 percent in the process. The Straits Times Index regained support at 1,700 points, and now investors are hopeful that the market will move further to the upside at the opening of trade on Thursday.
The global forecast for the Asian markets is optimistic thanks to better than expected economic news out of the United States. Also, corporate earnings from the U.S. auto sector were dismal, but still better than expected - also providing a bit of positive sentiment. The European and U.S. markets ended higher across the board, and the Asian stocks are tipped to modestly follow that lead.
The STI finished slightly higher on Wednesday, after more substantial gains from the morning session were eaten away by profit taking in the afternoon.
For the day, the index inched higher 2.27 points or 0.13 percent to close at 1,702.26 after trading between 1,689.87 and 1,727.38. Volume was 821.6 million shares worth 755.1 million Singapore dollars. There were 196 gainers and 174 decliners, with 835 stocks finishing unchanged. Among the actives, United Overseas Bank was up 0.8 percent and DBS Group finished unchanged.
The lead from Wall Street is upbeat as stocks showed a substantial turnaround over the course of the trading day on Wednesday, ending the day sharply higher after seeing some initial weakness. Investors shrugged off some negative news and turned their focus to better-than-expected reports on pending home sales, construction spending, and manufacturing activity.
The initial downward move came on the heels of the release of a report from ADP showing that non-farm private employment fell by a bigger than expected 742,000 jobs following a revised decrease of 706,000 jobs in February. Not long after the open, however, the National Association of Realtors said its index of pending home sales rose 2.1 percent to 82.1 in February from a reading of 80.4 in January. The increase by the index came as a surprise to economists, who had expected the reading to come in unchanged.
The Commerce Department also released its monthly report on construction spending for February, showing that spending fell 0.9 percent. Analysts had expected spending to fall 1.9 percent following a 3.5 percent decline in the previous month. Additionally, the ISM Manufacturing index edged up to 36.3 in March from 35.8 in February, although a reading below 50 still indicates a contraction in the sector. Economists had been expecting the index to come in at 36.0.
On the corporate front, the big three auto-makers continued to disappoint investors during Wednesday's session as all three posted massive declines in monthly sales. General Motors (GM) reported that total vehicle sales fell almost 45 percent in March to 156,380 units. Ford (F) also suffered a massive decline, with March sales plummeting about 41 percent year-over-year. Meanwhile, private auto giant Chrysler performed the best out of the big three, showing a decline in sales of less than 40 percent.
In other news, traders kept an eye on London throughout the session, waiting for news from the G20 summit of global leaders. The leaders will discuss efforts to deal with the weakness in the global economy. Thousands of protesters have taken to the London streets, expressing their anger over the state of the economy.
The major averages continued to perform well in late day trading, ending the session near their best levels of the day. The Dow closed up 152.68 points or 2 percent at 7,761.60, the Nasdaq closed up 23.01 points or 1.5 percent at 1,551.60 and the S&P 500 closed up 13.21 points or 1.7 percent at 811.08.
In economic news, Singapore will on Thursday provide March PMI numbers, with analysts expecting an index score of 45.6 - up from 45 in February. The electronics PMI is expected to come in at 44.2, up from 43.8 a month earlier.
Also, Singapore's private residential property prices fell 13.8 percent in the first quarter, after falling 6.1 percent in the fourth quarter, a flash report from the country's Urban Redevelopment Authority showed on Wednesday. Among the regions, the price of non-landed private residential properties declined 15.2 percent in the Core Central Region, during the first quarter, compared to a 6.5 percent drop in the fourth quarter.
In the Outside Central Region, the prices of non-landed private residential properties slipped 7.5 percent compared to a 5.9 percent decline in the previous quarter. At the same time, property prices went down 17.2 percent in the Rest of Central Region, compared to a 6.2 percent fall in the fourth quarter.
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