RTTNews - The Singapore stock market on Monday saw an end to the five-day winning streak in which it had added nearly 100 points or 4 percent in the process. The Straits Times Index is clinging to support above the 2,600-point plateau, although analysts are predicting that the market will crash through that level at the opening of trade on Tuesday.
The global forecast for the Asian markets remains solidly pessimistic after most of the markets saw heavy losses in Monday's trade. Resource stocks are expected to remain under pressure following a fall in commodity prices, while airlines, properties and financials also could see significant losses. The European and U.S. markets finished broadly negative, and the Asian markets are also tipped to move to the downside.
The STI finished sharply lower on Monday, following heavy losses in the mainland Shanghai market. Financials and property stocks fell under heavy selling pressure throughout the session, while the industrials also ended lower.
For the day, the index dropped 37.41 points or 1.42 percent to close at 2,605.39 after trading between 2,592.90 and 2,667.82. Volume was 2.76 billion shares worth 2.03 billion Singapore dollars. There were 463 decliners and 142 gainers, with 758 stocks finishing unchanged.
Among the decliners, DBS, United Overseas Bank, Oversea-Chinese Banking Corp, CapitaLand, Singapore Airlines, Singapore Telecom, Keppel Corp, Neptune Orient Lines and Singapore Press Holdings all finished lower.
The lead from Wall Street is firmly negative as stocks remained mostly negative throughout the trading day on Monday after moving sharply lower in early trading. While the major averages did not see much follow-through on their initial downward move, they remained stuck in the red.
The weakness in the markets came as a sell-off in the Chinese stock market inspired some traders to cash in on recent strength. Nonetheless, selling pressure remained relatively subdued ahead of the release of some key economic data later this week.
Traders largely shrugged off the results of the Institute for Supply Management - Chicago's survey of regional manufacturing activity, which showed that activity unexpectedly reached neutral territory in August following ten consecutive months of contraction. The index of manufacturing activity rose to 50.0 in August from 43.4 in July, with a reading of 50 acting as the breakeven point versus contraction and expansion. Economists had been expecting a more modest increase to a reading of 48.0.
In corporate news, Walt Disney (DIS) announced that it has agreed to acquire Marvel Entertainment (MVL) in a stock and cash transaction. Marvel shareholders will receive a total of $30 per share in cash plus approximately 0.745 Disney shares for each Marvel share they own.
The major averages moved well off their lows going into the close, although they still ended the day firmly in negative territory. The Dow closed down by 47.92 points or 0.5 percent at 9,496.28, the NASDAQ fell by 19.71 points or 1 percent to 2,009.06 and the S&P 500 slipped by 8.31 points or 0.8 percent to close at 1,020.62.
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