The Singapore stock market headed south again on Thursday - one session after it had halted the three-day losing streak in which it had fallen more than 15 points or 0.6 percent. The Straits Times Index finished just above the 3,010-point plateau, and now investors are bracing for continued selling pressure when the market opens on Friday.
Caution is the word of the day for the Asian markets, ahead of Federal Reserve Chairman Ben Bernanke's remarks at the Kansas City Fed's Jackson Hole symposium later in the day. Traders are hoping that Bernanke will make comments indicating whether the central bank will engage in another round of quantitative easing. Adding to the cautious sentiment, the U.S. Labor Department reported that jobless claims failed to improve last week, as was expected. The European and U.S. markets were down, and the Asian bourses are expected to follow that lead.
The STI finished sharply lower on Thursday following losses from the financial shares and the plantation stocks.
For the day, the index lost 29.75 points or 0.98 percent to finish at 3,011.82 after trading between 3,004.76 and 3,033.36on volume of 1.23 billion shares. There were 288 decliners and 110 gainers.
Among the decliners, Golden Agri-Resources shed 2.1 percent, while Wilmar International lost 1.6 percent, United Overseas Bank gave away 3 percent, DBS Group Holdings retreated 1 percent and Oversea-Chinese Banking Corp. dipped 0.3 percent.
The lead from Wall Street is soft as stocks saw notable weakness on Thursday after turning in a lackluster performance over the three previous sessions. Uncertainty ahead of Bernanke's speech contributed to the weakness on Wall Street.
A research note from Capital Economics said: "Given the unexpectedly strong signal in the minutes of the latest FOMC meeting that QE3 is coming fairly soon, we expect that Fed Chairman Ben Bernanke will reinforce the case for more action in his speech at Jackson Hole."
Further selling pressure was generated by a report that Spanish Prime Minister Mariano Rajoy said his government will delay deciding whether to seek a sovereign bailout until the aid conditions are clear.
On the economic front, the Labor Department reported that jobless claims unexpectedly came in unchanged in the week ended August 25. Initial jobless claims came in at 374,000, unchanged compared to the previous week's revised figure. Economists had expected jobless claims to edge down to 370,000 from the 372,000 originally reported.
A separate report from the Commerce Department showed that personal income rose by 0.3 percent in July, matching the increases in the two previous months and in line with economist estimates. The report also showed that personal spending increased by 0.4 percent in July after coming in flat in June - also as expected.
The major U.S. averages were down on Thursday as the S&P 500 fell 11.01 points or 0.8 percent to finish at 1,399.48, while the Dow slid 106.77 points or 0.8 percent to end at 13,000.71 and the NASDAQ dropped 32.48 points or 1.1 percent to close at 3,048.71.
by RTT Staff Writer
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