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Singapore Stock Market May Test Resistance At 3,000 Points

The Singapore stock market picked up less than a point on Friday - but that was enough to extend its winning streak to four sessions, rising almost 20 points or 0.7 percent in the process. The Straits Times Index finished just above the 2,980-point plateau, and now traders are anticipating further upside when the market kicks off trade on Monday.

The global forecast for the Asian markets is cautiously optimistic, thanks to upbeat earnings news and better than expected consumer sentiment in the United States. Tempering the upside, U.S. GDP increased 2.2 percent in the first quarter compared to 3.0 percent in Q4 - well shy of expectations for a gain of 2.5 percent. Also, Italy's 10-year borrowing costs increased at an auction on Friday, which increased concerns that the country may seek a bailout. The European and U.S. markets finished slightly higher, and the Asian bourses are expected to follow suit.

The STI finished flat on Friday as gains from the financial shares were offset by losses from the properties and telecoms.

For the day, the index added 0.11 points to finish at 2,981.58 after trading between 2,975.24 and 2,995.93 on volume of 3.34 billion shares. There were 310 decliners and 121 gainers.

Among the actives, SingTel shed 1.27 percent, while CapitaLand fell 0.68 percent, DBS Group Holdings jumped 2.0 percent and United Overseas Bank spiked 2.3 percent.

The lead from Wall Street is positive as stocks moved mostly higher on Friday, although buying interest was relatively subdued. The strength followed upbeat earnings news from big-name companies like Amazon.com (AMZN), with the online retailer surging by 15.8 percent after reporting its first quarter results. Drug giant Merck (MRK) and auto giant Ford (F) also reported better than expected Q1 earnings but ended the day in the red.

Positive sentiment was also generated by a report from Reuters and the University of Michigan showing an unexpected improvement in U.S. consumer sentiment in April. The consumer sentiment index came in at 76.4 compared to the mid-month reading of 75.7. With the upward revision, the index came in above March's final reading of 76.2 and is at its highest level since February of 2011.

The upbeat data helped to offset negative sentiment from the Commerce Department, which reported weaker than expected economic growth in the first quarter. GDP increased 2.2 percent in Q1 compared to the 3.0 percent growth in the fourth quarter. Economists had been looking for 2.5 percent. While GDP rose by less than expected in the first quarter, it still marked the eleventh consecutive quarter of economic growth.

The major averages ended the day in positive territory but off their highs for the session. The Dow edged up 23.69 points or 0.2 percent to finish at 13,228.31, while the NASDAQ climbed 18.59 points or 0.6 percent to end at 3,069.20 and the S&P 500 crept up 3.38 points or 0.2 percent to 1,403.36. The major averages all closed higher for the week as the Dow rose by 1.5 percent, while the NASDAQ and the S&P 500 advanced by 2.3 percent and 1.8 percent, respectively.

In economic news, Singapore's producer price index increased 2.5 percent on year in March, Statistics Singapore said on Friday, slower than 3.4 percent in February. In January, the inflation rate was 5.9 percent. Prices of goods sold in the domestic market grew 4.1 percent annually during the month. On a monthly basis, output prices moved up at a faster pace of 1.5 percent in March than the previous month's 0.5 percent increase.

Separately, the agency said Singapore's import price index increased 1 percent month-on-month in March, taking the annual growth to 2.3 percent. Export prices rose 0.6 percent on a monthly basis, and gained 0.5 percent compared to March 2011.

Also, Singapore's private home prices decreased slightly in the first quarter, after increasing for nine successive quarters, the Urban Redevelopment Authority said on Friday. Prices of private residential properties decreased 0.1 percent sequentially in the first quarter, reversing the 0.2 percent increase recorded in the fourth quarter. The latest decline was the first since the second quarter of 2009.

by RTT Staff Writer

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