The Singapore stock market has finished lower now in three straight sessions, shedding more than 40 points or 1.4 percent in that span. The Straits Times Index finished just above the 2,815-point plateau, and now traders are expecting further damage when the market kicks off trade on Tuesday.
The global forecast for the Asian markets remains negative on lingering concerns about the ongoing European debt crisis. Spain has now formally asked for a bailout to shore up its ailing banking sector, and it was quickly followed by a similar request from Cyprus. In addition, Moody's downgraded 28 Spanish banks - although better than expected economic data from the U.S. may provide support. The European and U.S. markets finished sharply mower, and the Asian bourses are also expected to open in the red.
The STI finished modestly lower on Monday following losses from the industrials and plantation stocks.
For the day, the index shed 12.83 points or 0.45 percent to finish at 2,815.26 after trading between 2,808.83 and 2,824.68 on volume of 1.24 billion shares. There were 184 decliners and 158 gainers.
Among the decliners, Olam International lost 2.4 percent, while Wilmar International fell 1.4 percent, Noble Group dropped 0.9 percent, SembCorp Marine shed 2 percent and Keppel Corp. slipped 1.09 percent.
The lead from Wall Street suggests continued consolidation as stocks moved sharply lower during trading on Monday after seeing considerable volatility last week. Lingering concerns about the ongoing European debt crisis weighed on the markets amid worries about the impact on the global economy.
The sell-off came as traders kept a close eye on the latest developments in Europe, where Spain formally asked for a bailout to shore up its ailing banking sector. Europe is likely to remain in focus throughout the week, as European leaders are due to hold a summit to discuss the ongoing debt crisis on Thursday and Friday.
Meanwhile, traders largely shrugged off a report from the Commerce Department showing a bigger than expected increase in U.S. new home sales.
The report showed sales of new single-family homes at a seasonally adjusted annual rate of 369,000 in May, a 7.6 percent increase from the revised April rate of 343,000. Economists had expected new home sales to climb to 350,000. With the much bigger than expected increase, new home sales in May came in at their highest level since April of 2010.
After moving sharply lower in early trading, the major averages remained stuck firmly in the red throughout the session. The Dow fell 138.12 points or 1.1 percent to finish at 12,502.66, while the NASDAQ tumbled 56.26 points or 2 percent to end at 2,836.16 and the S&P 500 slid 21.30 points or 1.6 percent to 1,313.72.
In economic news, Singapore is on Tuesday scheduled to release May figures for industrial production. Analysts are looking for an increase of 3.15 percent on month and 2.25 percent on year following the 3.5 percent monthly contraction and the 0.3 percent annual decline in April.
Also, inflation in Singapore eased to a three-month low of 5 percent in May from 5.4 percent in April, Statistics Singapore said on Monday. Economists had expected 5.1 percent. On a monthly basis, CPI was up 0.2 percent. Food prices increased 2.5 percent year-on-year in May, while transport charges climbed 9.2 percent. Housing costs were 8.2 percent higher than a year earlier.
Also, the central banks of Singapore and Thailand have signed a Memorandum of Understanding to improve liquidity and promote financial stability. Under this arrangement, financial institutions operating in Singapore may obtain Singapore dollar liquidity from the Monetary Authority of Singapore by pledging Thai baht or Thai government and central bank securities. Likewise, eligible financial institutions operating in Thailand may obtain Thai baht liquidity from Bank of Thailand by pledging Singapore dollar or Singapore government and central bank securities.
by RTT Staff Writer
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