Market Commentary and Intraday News

Soft Start Seen For Singapore Stock Market

226 days ago

(RTTNews) - The Singapore stock market on Monday wrote a finish to the modest two-day winning streak in which it had collected more than 30 points or 1 percent. The Straits Times Index closed just above the 3,075-point plateau, and now traders are bracing for continued selling pressure when the market kicks off trade on Tuesday.

The global forecast for the Asian markets is negative after the World Bank cut its growth outlook for the East Asia region, to 7.2 percent this year from 8.3 percent in 2011. The forecast is weaker than the bank's May projection of 7.6 percent growth. In addition, Greece-troika talks continue to drag and Spain remains reluctant to request a bailout, even as European leaders continued to stress on the 'urgency' to contain the crisis. The European and U.S. markets were mostly lower, and the Asian markets are expected to open in similar fashion.

The STI finished sharply lower on Monday following losses from the financial shares and the property stocks.

For the day, the index dipped 31.22 points or 1.00 percent to finish at 3,076.65 after trading between 3,072.47 and 3,105.04 on volume of 1.79 billion shares. There were 350 decliners and 117 gainers.

Among the decliners, DBS Group dropped 1.45 percent and City Developments plummeted 2.34 percent.

The lead from Wall Street suggests consolidation as stocks moved mostly lower during trading on Monday as traders expressed renewed concerns about the outlook for the global economy. The losses on the day partly offset the strength that was seen in the markets last week.

The weakness on Wall Street was partly due to negative sentiment generated by news that the World Bank cut its growth outlook for the East Asia region as growth in developing economies in East Asia is expected to slow to 7.2 percent this year from 8.3 percent in 2011. The forecast is weaker than the bank's May projection of 7.6 percent growth.

East Asian growth is seen recovering to 7.6 percent in 2013, backed by continued strong domestic demand and an uptick in global trade growth. However, the estimate is lower than an earlier prediction of 8 percent growth.

Traders also kept an eye on developments in Europe, where European finance ministers are holding a meeting to discuss the region's debt crisis. Nonetheless, trading activity remained relatively subdued, with many traders away from their desks due to the Columbus Day holiday.

The major U.S. averages were down on Monday as the Dow edged down 26.50 points or 0.2 percent to finish at 13,583.65, while the NASDAQ fell 23.84 points or 0.8 percent to end at 3,112.35 and the S&P 500 slid 5.05 points or 0.4 percent to close at 1,455.88.

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