The four-day winning streak for the Singapore stock market is history, after it had climbed more than 85 points or 3 percent en route to a fresh one-month closing high. The Straits Times Index finished just above the 2,830-point plateau, and now investors are bracing for continued selling pressure when the market opens on Friday.
The global forecast for the Asian markets remains soft on disappointing economic data from around the globe. China's manufacturing sector performance continued to worsen with the factory activity entering an eighth month of contraction in June. Spain's borrowing costs climbed again at a debt auction on Thursday despite rising demand. In the United States, existing home sales fell more than expected, and Moody's downgraded 14 of the world's largest banks. The European and U.S. markets were sharply lower, and the Asian bourses are tipped to follow suit.
The STI finished modestly lower on Thursday following losses from the property stocks and plantations.
For the day, the index lost 25.53 points or 0.89 percent to finish at 2,830.15 after trading between 2,826.28 and 2,850.84 on volume of 1.21 billion shares. There were 193 decliners and 128 gainers.
Among the decliners, City Developments shed 0.65 percent, while Fraser and Neave lost 1.43 percent, Olam International plunged 5.4 percent, Noble Group fell 3 percent, Wilmar International dropped 1.6 percent, Golden Agri-Resources retreated 3.8 percent, SembCorp Marine shed 1.7 percent, Keppel Corp lost 0.9 percent and Genting Singapore fell 1.1 percent.
The lead from Wall Street is broadly negative as stocks moved sharply lower on Thursday after showing a lack of direction early in the session. A batch of disappointing U.S. economic data inspired traders to cash in on the gains from the past two weeks.
The sell-off followed a National Association of Realtors report showing that existing home sales fell by 1.5 percent to a seasonally adjusted annual rate of 4.55 million in May from 4.62 million in April. Economists had expected a slightly more modest decrease to an annual rate of 4.57 million.
A separate report from the Philadelphia Federal Reserve showed that its diffusion index of current activity fell to a negative 16.6 in June from a negative 5.8 in May, with a negative reading indicating a contraction in regional manufacturing activity.
Additionally, the Labor Department's report on initial jobless claims in the week ended June 16 showed that claims fell modestly but still beat estimates.
The release of the disappointing data came on the heels of the Federal Reserve's announcement Wednesday of the extension of its "Operation Twist" program until the end of the year. Fed Chairman Ben Bernanke also noted that the central bank is prepared to take additional steps to prop up the sluggish economy.
Among individual stocks, shares of Bed Bath & Beyond (BBBY) tumbled 17 percent after the home furnishings retailer reported better than expected first quarter earnings but provided disappointing guidance. With the loss, Bed Bath & Beyond fell to a three-month closing low.
The major averages saw further downside going into the close, ending the session just off their worst levels of the day. The Dow plunged 250.82 points or 2 percent to finish at 12,573.57, while the NASDAQ tumbled 71.36 points or 2.4 percent to end at 2,859.09 and the S&P 500 plunged 30.18 points or 2.2 percent to 1,325.51.
by RTT Staff Writer
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