The Singapore stock market has finished lower now in back-to-back sessions, retreating almost 50 points or 1.67 percent along the way. The Straits Times Index finished just above the 2,980-point plateau, and now analysts are forecasting additional selling pressure at the opening of trade on Tuesday.
The global forecast for the Asian markets remains broadly negative thanks to increasing concerns over Europe, although the losses may be pared by bargain hunting following the heavy damage suffered in the previous session. Spain announced a ban on short sales of stocks for three months, while Italy banned short sales of stocks in the financial sector for one week. The European and U.S. markets were sharply lower, and the Asian bourses are tipped to open in the red again.
The STI finished sharply lower on Monday following losses from the financial shares and industrials.
For the day, the index dropped 33.04 points or 1.10 percent to finish at 2,982.49 after trading between 2,973.93 and 3,001.70 on volume of 1.44 billion shares. There were 316 decliners and 85 gainers.
Among the actives, Neptune Orient Lines plunged 6.2 percent and Fraser and Neave surged 4.2 percent.
The lead from Wall Street remains brutal as stocks regained some ground over the course of the session after moving sharply lower at the start of trading on Monday, but still ended the day firmly in the red. The sell-off came as worries about the ongoing European debt crisis resurfaced amid indications that Spain may require a full bailout.
Contributing to the worries about Spain, the country's central bank said Spanish GDP fell by 0.4 percent in the second quarter following a 0.3 percent contraction in the first quarter.
Traders also expressed concerns about developments in Greece, with officials from the country's troika of international creditors due to visit Athens on Tuesday to review the progress Greece has made with respect to enacting reforms and austerity measures. The International Monetary Fund reportedly does not want to provide Greece with any additional financing.
The focus on Europe came amid a lack of major U.S. economic data. Nonetheless, some traders used the initial weakness on Wall Street as an opportunity to pick up stocks at reduced levels, contributing to the recovery attempt by the broader markets.
Among individual stocks, shares of McDonald's (MCD) came under pressure after the fast food giant reported second quarter earnings that fell year-over-year. McDonald's fell by 2.9 percent, pulling back further off last Thursday's two-month closing high.
The major averages moved roughly sideways going into the close of trading, stuck firmly in negative territory. The Dow fell 101.11 points or 0.8 percent to finish at 12,721.46, while the NASDAQ slid 35.15 points or 1.2 percent to end at 2,890.15 and the S&P 500 dropped 12.14 points or 0.9 percent to 1,350.52.
On the economic front, Singapore's annual inflation accelerated to 5.3 percent in June from 5 percent in May, the Ministry of Trade and Industry and the Monetary Authority of Singapore said on Monday. The rate also exceeded the 5.1 percent consensus forecast. On a month-on-month basis, overall consumer prices remained flat in June after edging up by 0.2 percent in the preceding month.
by RTT Staff Writer
For comments and feedback: editorial@rttnews.com
Market Analysis