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Continued Consolidation Called For Singapore Bourse

The Singapore stock market has moved lower in back-to-back trading days, surrendering almost 50 points or 1.5 percent along the way. The Straits Times Index now rests just above the 3,390-point plateau and it may take further damage again on Thursday.

The global forecast for the Asian markets is negative thanks to renewed concern over the outlook for interest rates. The European and U.S. markets were down and the Asian bourses figure to follow that lead.

The STI finished sharply lower on Wednesday following losses from the financial shares, industrial issues and plantations.

For the day, the index tumbled 38.18 points or 1.11 percent to finish at 3,392.51 after trading between 3,388.92 and 3,432.64. Volume was 1.48 billion shares worth 1.21 billion Singapore dollars. There were 285 decliners and 143 gainers.

Among the actives, United Overseas Bank plummeted 2.73 percent, while StarHub plunged 2.69 percent, Thai Beverage tumbled 2.50 percent, SembCorp Industries skidded 2.40 percent, Keppel Corp dropped 2.14 percent, Oversea-Chinese Banking Corporation retreated 1.91 percent, Golden Agri-Resources declined 1.59 percent, Yangzijiang Shipbuilding slid 1.52 percent, CapitaLand shed 1.15 percent, DBS Group gave away 1.12 percent, Genting Singapore spiked 0.79 percent, SingTel fell 0.62 percent, Comfort DelGro added 0.41 percent, Ascendas REIT gained 0.38 percent and Hutchison Port Holdings, Singapore Technologies, CapitaLand Mall Trust and Wilmar International were unchanged.

The lead from Wall Street is soft as stocks saw modest strength for much of Wednesday but came under pressure following the Federal Reserve's monetary policy announcement.

The Dow slid 119.53 points or 0.47 percent to 25,201.20, while the NASDAQ eased 8.09 points or 0.11 percent to 7,695.70 and the S&P 500 fell 11.22 points or 0.40 percent to 2,775.63.

The pullback came after the Fed announced its decision to raise interest rates by 25 basis points to a range of 1.75 to 2 percent. The rate hike was widely expected, but the Fed surprised investors by forecasting two additional rate hikes this year after previously predicting only one rate.

The central bank said data received since its May meeting indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate.

In economic news, the Labor Department noted a bigger than expected increase in producer prices in May - while core producer prices also ticked higher.

Crude oil futures rose Wednesday after energy inventories fell more than forecast. July WTI oil climbed 28 cents or 0.4 percent to settle at $66.64/bbl.

by RTTNews Staff Writer

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