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Singapore Stock Market May Move Lower On Monday.

4/15/2012 8:15 PM ET

The Singapore stock market has closed higher now in back-to-back sessions, gathering almost 40 points or 1.3 percent along the way. The Straits Times Index finished just below the 2,990-point plateau, and now investors may be tempted to lock in gains when the market opens on Monday.

The global forecast for the Asian markets suggests consolidation, with investors likely locking in gains after rallying on Friday. Concerns from Europe's financial sector add to the cautious sentiment after data showed that Spanish banks stepped up their borrowings from the European Central Bank in March. The European and U.S. markets finished lower, and the Asian bourses are tipped to follow that lead.

The STI finished slightly higher on Friday following gains from the financial shares and the ship builders.

For the day, the index gained 9.68 points or 0.33 percent to finish at 2,987.82 after trading between 2,984.59 and 3,006.31. Volume was 4.53 billion shares worth 1.4 billion Singapore dollars. There were 230 gainers and 169 decliners.

Among the gainers, SembCorp Marine collected 2.7 percent, while Keppel Corp jumped 2 percent, United Overseas Bank added 1 percent and DBS Group Holdings gathering 0.5 percent.

The lead from Wall Street is negative as stocks moved sharply lower on Friday, giving back some ground after posting strong gains in the two previous sessions. Renewed concerns about corporate earnings and the global economy contributed to the weakness in the markets.

The pullback was partly due to disappointing economic news out of China, the world's second largest economy behind the U.S. Data released by the Chinese National Bureau of Statistics showed that Chinese economic growth slowed to 8.1 percent in the first quarter from 8.6 percent in the fourth quarter. Economists had expected a more modest slowdown to 8.4 percent.

Traders also reacted negatively to quarterly results from JP Morgan (JPM) and Wells Fargo (WFC), which closed notably lower despite reporting better than expected first quarter earnings.

Additional negative sentiment followed a report from Reuters and the University of Michigan showing an unexpected deterioration in U.S. consumer sentiment in April. The preliminary reading on consumer sentiment in April fell to 75.7 compared to March's final reading of 76.2. Economists had expected the index to come in unchanged on month. A separate report from the Labor Department showed an increase in consumer prices in March that matched economic estimates.

The major averages saw further downside going into the close, ending the session near their worst levels of the day. The Dow slid 136.99 points or 1.1 percent to finish at 12,849.59, while the NASDAQ tumbled 44.22 points or 1.5 percent to end at 3,011.33 and the S&P 500 fell 17.31 points or 1.3 percent to 1,370.26. With the losses on the day and the sell-off earlier in the week, the major averages all posted weekly losses. The Dow fell by 1.6 percent, while the NASDAQ and the S&P 500 dropped by 2.2 percent and 2 percent, respectively.

In economic news, Singapore's gross domestic product climbed a seasonally adjusted annualized 9.9 percent in the first quarter of 2012 compared to the previous three months, the Ministry of Trade and Industry said on Friday in an advanced estimate. That follows the 2.5 percent contraction in the fourth quarter of 2011. On a yearly basis, GDP added 1.6 percent after collecting 3.6 percent in Q4, 5.9 percent in the third quarter and 0.9 percent in Q2.

Also, the Monetary Authority of Singapore unexpectedly tightened monetary policy on Friday to support growth and ease core inflationary pressures. In a statement, MAS said that it is increasing the slope of the S$NEER policy band slightly, allowing "slightly" faster appreciation of Singapore dollar. The move is expected to help anchor inflation expectations, ensure medium-term price stability, and keep growth on a sustainable path.

MAS said there will be no change to the level at which the band is centered, but it is restoring a narrower policy band. Looking ahead, external inflationary pressures are likely to be sustained, largely due to higher oil prices, the central bank said.

Finally, retail sales in Singapore grew stronger than expected in February, helped by a surge in automobile sales, figures from the Department of Statistics showed on Friday. Sales increased 19 percent year-on-year in February, while economists' expectations were for a 15 percent increase. This followed an anemic 1.8 percent increase in January.

by RTT Staff Writer

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