The Singapore stock market has alternated between positive and negative finishes through the last five trading days since the end of the two-day losing streak in which it had given away almost 50 points or 1.67 percent. The Straits Times Index finished just above the 3,030-point plateau, and now traders are looking for another firm start when the market kicks off trade on Tuesday.
The global forecast for the Asian markets is mixed to higher following continued positive momentum from Europe - although the upside may be capped by profit-taking after several days of rallies. Italy and Spain saw their borrowing costs ease on Monday as investor confidence improved on hopes of some crucial action from the European Central Bank. The European markets were sharply higher and the U.S. bourses were mixed but little changed - and the Asian markets figure to split the difference.
The STI finished sharply higher on Monday following gains from the plantation stocks and casino operators.
For the day, the index surged 34.31 points or 1.14 percent to finish at 3,032.80 after trading between 3,015.46 and 3,039.35 on volume of 1.31 billion shares. There were 241 gainers and 126 decliners.
Among the gainers, Genting Singapore surged 7.35 percent, while Golden Agri-Resources climbed 2.8 percent, Noble Group jumped 1.9 percent and Olam International spiked 1.9 percent.
The lead from Wall Street provides little clarity as stocks finished a choppy session with mild losses. With traders looking ahead to key information due out later in the week, the market was unable to find significant momentum.
Traders resisted the temptation to take profits after the recent run-up, as hope remains for a solution for the euro-zone debt crisis or for signs of additional stimulus from the Federal Reserve. Stocks saw some modest gains by the mid-morning, but a mid-day slide reversed that advance, however, and shares held below the flat line through much of the rest of the day.
German Chancellor Angela Merkel and Italian Prime Minister Mario Monti again vowed to defend the euro during a phone conversation on Sunday. They also stated that the decisions made at the EU summit last month must be implemented as quickly as possible.
Italy and Spain saw their borrowing costs ease on Monday on hopes of action from the European Central Bank, which holds its rate-setting session later this week. The yield on the 10-year Italian bond dropped to 5.96 percent from 6.19 percent on June 28. The 5-year debt fetched a yield of 5.29 percent, down from 5.84 percent at the previous sale on June 28. Spanish 10-year bond yield fell to 6.59 percent in the secondary market.
On the corporate front, CB&I (CBI) has reached a definitive merger deal to acquire Shaw Group (SHAW) for around $3 billion. The company will pay $46 per share in a cash and stock transaction. CB&I dropped $5.76, or 14.2 percent, to close at $34.94.
The Dow Jones Industrial Average slipped 2.65 points, or less than 0.1 percent, to close at 13,073.01. The gains last week allowed the Dow to push back above the 13,000 mark. The S&P 500 dipped less than a point to close at 1,385.30. The NASDAQ was the worst performer among the major averages. It slipped 12.25 points, or 0.41 percent, to close at 2,945.84.
In economic news, Singapore will on Tuesday provide unemployment data for the second quarter of 2012; in the first quarter, the unemployment rate was 2.1 percent.
by RTT Staff Writer
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