Decline Predicted For Singapore Stocks

(RTTNews) - The Singapore stock market has finished higher in two of the last three sessions, adding more than 60 points or 1.9 percent in the process. But now investors are bracing for a day of sharply lower trade on Thursday as the Straits Times Index is tipped to follow the rest of the region to the downside.

There wasn't much good news for the markets from abroad. The price of crude oil resumed its upward march, and a disappointing quarterly earnings report from Morgan Stanley is expected to keep the financial sectors under pressure throughout the region over skittishness on lingering credit concerns. That was enough to force the U.S. markets lower, and the Asian markets are forecast to do the same.

The STI finished modestly higher on Wednesday, supported by properties and financials. For the day, the index gained 11.85 points or 0.39 percent to close at 3,040.09 after trading between 3,010.87 and 3,047.22. Volume was 1.63 billion shares worth 1.63 billion Singapore dollars. There were 267 gainers and 228 decliners, with 986 stocks remaining unchanged.

Among the gainers, DBS Group was up 0.6 percent, while United Overseas Bank added 0.7 percent, City Developments was up 3.5 percent, Keppel Land gained 0.2 percent, CapitaLand was up 2.1 percent, Singapore Exchange added 0.3 percent and Singapore Telecom gained 0.3 percent. Bucking the trend, Keppel Corp lost 1.0 percent.

Wall Street provides a broadly negative lead as stocks ended Wednesday's session sharply lower following the release of some disappointing quarterly results. With little in the way of economic data to sway the markets, investors looked toward corporate news to give them guidance.

Before the markets opened, package delivery giant FedEx reported a loss in its fourth quarter compared to a profit last year, impacted by a Kinko's-related charge along with ongoing growth in fuel prices and lower demand due to the weak U.S. economy. FedEx also provided first-quarter and fiscal 2009 earnings guidance that was lower than analysts' estimates. The weak forecast serves as just another sign of the effects of surging energy prices, which have nearly doubled in the past year.

Separately, financial services firm Morgan Stanley announced a profit for the second quarter that dropped from last year despite a boost from a pair of divestitures. The company suffered from the difficult market conditions that have plagued the industry since the subprime meltdown. Earnings from the large Wall Street firms have been a sensitive subject for the markets lately as investors worry that another Bear Stearns-like crisis could be poised to emerge.

San Francisco Federal Reserve President Janet Yellen cautioned Wednesday that, although financial markets have moderated following the turmoil that marked the end of 2007 and beginning of 2008, conditions are "still not normal."

The Dow briefly slipped below the psychologically important 12,000 mark during the session, but the blue chip index ended the day back above that level. The Dow closed down 131.24 points or 1.1 percent at 12,029.06, the Nasdaq closed down 28.02 points or 1.1 percent at 2,429.71 and the S&P 500 closed down 13.12 points or 1 percent at 1,337.81.

In economic news, Hong Kong and Singapore have the best trade environment around the world, according to a report released Wednesday by the World Economic Forum. The Global Enabling Trade Report ranked 118 economies worldwide based on a so-called Enabling Trade Index. The index measures four factors which facilitate the free flow of goods over borders and to destination, including market access, border administration, transport and communications infrastructure, and business environment.

On the corporate front, Singapore Airlines has won the 'best airline' accolade at the annual awards ceremony held by consumer magazine Which? The carrier celebrated the achievement just a few weeks after it was named airline of the year by the Official Airline Guide. Which? picked Singapore Airlines after surveying opinions on more than 30,000 long- and short-haul flights provided by 71 carriers.

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