RTTNews - The Singapore stock market on Tuesday wrote a finish to the three-day losing streak in which it had shed more than 80 points or 3.7 percent. The Straits Times Index regained support at 2,270 points following the slide, although analysts are predicting sharp declines at the opening of trade on Wednesday.
The global forecast for the Asian markets is laced with pessimism as investors are likely to be cautious ahead of the opening of corporate reporting season for the second quarter. A steady decline in commodities for the fifth straight day also is expected to weigh on investors. The European and U.S. markets finished sharply lower, and the Asian bourses are tipped to follow that lead.
The STI finished slightly higher on Tuesday, thanks to gains among the properties, telecoms and airlines.
For the day, the index added 6.17 points or 0.27 percent to close at 2,272.26 after trading between 2,263.52 and 2,292.04. Volume was 1.12 billion shares worth 998 million Singapore dollars. There were 207 decliners and 170 gainers, with 865 stocks finishing unchanged.
Among the gainers, Singapore Airlines, Singapore Telecommunications, United Overseas Bank, Oversea-Chinese Banking Corp, CapitaLand and City Developments all finished higher.
The lead from Wall Street is broadly negative as stock finished sharply lower on Tuesday, with traders doing some profit taking on the day amid a lack of significant economic data to drive trading. The major averages all closed lower by considerable margins, with the sell off accelerating late in the session. Cashing in on recent gains, traders braced for what is expected to be a dreary earnings reporting season, with aluminum producer Alcoa (AA) set to report after the close of trading on Wednesday.
Aside from the earnings data on tap for the second half of the week, traders are also looking ahead to a series of economic reports on employment, international trade and consumer sentiment, with expectations deflated following disheartening employment data last week.
Earlier today, the results of the Treasury's auction of $35 billion worth of three-year notes cooled investor anxiety in regards to rising interest rates amid the recessionary economic conditions. The sale drew a high-yield of 1.519 percent and attracted moderately strong demand, with the bid-to-cover ratio coming in at 2.62. The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
Monday, an auction of 10-year Treasury Inflation Protect Securities, or TIPS, drew a yield of 1.92 percent and a bid-to-cover ratio of 2.51, its highest in nine years. Traders will also look the Treasury's sale of $19 billion worth standard ten-year notes on Wednesday. The results of the standard ten-year auction and the sale of TIPS will be closely watched by investors, who will compare the yields to gauge the prospect of near-term inflation.
The government has continued to sell bonds in record amounts to fund its accelerated stimulus spending, while recent comments from the Obama administration have led to rampant speculation regarding a second stimulus package.
The major averages all finished lower, seeing further downside in late day trading. The Dow fell 161.27 points or 1.9 percent to 8,163.60, the NASDAQ closed down 41.23 points or 2.3 percent at 1,746.17, while the S&P 500 dropped by 17.69 or 2 percent at 881.03.
In economic news, the Monetary Authority of Singapore said on Tuesday that the total official foreign reserves increased to US$173.19 billion in June from US$171.75 billion in May.
In Singapore dollars, the total official reserves grew to S$250.8 billion in June from S$248.27 billion in the preceding month. The gold and foreign exchange reserves increased to S$249.9 billion from S$247.4 billion in May, while the reserve position in the IMF moved up to S$313.9 million from S$312.5 million. However, the SDRs remained unchanged at S$534.8 million.
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