Singapore Market May Extend Gains

(RTTNews) - The Singapore stock market on Wednesday halted the three-day losing streak that had cost the market nearly 90 points or 3.5 percent along the way. Now the Straits Times is tipped to continue modestly into positive territory, in line with the rest of the region, when the market kicks off trade on Thursday.

The global forecast is a generally positive one for the Asian markets, thanks to stronger than expected corporate results out of the United States. Even the recently battered American financial stocks rallied overnight, although concerns about the mortgage lending industry continued to weigh on investors and capped those gains. That was enough to lead the U.S. markets modestly higher, and the Asian bourses are predicted to do the same.

The STI finished modestly higher on Wednesday as afternoon bargain hunting helped the market to recover from sharp losses in the morning session. Financial stocks finished sharply higher after being oversold during the recent losing streak, while marine stocks also were in favor.

For the day, the index gained 23.36 points or 0.86 percent to close at 2,751.75 after trading between 2,711.76 and 2,754.90. Volume was 1.06 billion shares worth 1.21 billion Singapore dollars. There were 265 gainers and 237 decliners, with 882 stocks remaining unchanged.

Among the gainers, CapitaLand was up 2.0 percent, while City Developments added 3.0 percent, DBS Group was up 0.2 percent, Oversea-Chinese Banking Corp gained 1.1 percent, United Overseas Bank was up 0.9 percent, Singapore Telecom firmed 0.3 percent, Keppel Corp. edged up 1.6 percent and SembCorp Marine added 3.5 percent. Bucking the trend, Keppel Land was off 0.5 percent, Singapore Airlines eased 0.5 percent and Singapore Exchange slipped 0.9 percent.

Wall Street offers a positive lead as stocks ended Wednesday's session with notable gains after investors looked for bargains following sharp losses in the previous two sessions. Positive quarterly results from Hewlett-Packard (HPQ | Quote | Chart | News | PowerRating) contributed to the strength, although weakness in Fannie Mae (FNM | Quote | Chart | News | PowerRating) and Freddie Mac (FRE | Quote | Chart | News | PowerRating) weighed on the markets at times.

Hewlett Packard gave investors reason to buy into the markets after the printer and computer maker reported better than expected quarterly earnings and offered an upbeat forecast for its current quarter. But Fannie Mae and Freddie Mac continued to pressure the markets, falling more than 20 percent earlier in the week on reports that the Treasury may have to bail them out. Investors have been increasingly worried that if the government does bail them out, their stocks may drop to zero.

Despite the weakness with Fannie Mae and Freddie Mac, other financials rallied in late day trading, contributing to the strength seen in the broader markets at the end of the session. Also, Microsoft Corp. (MSFT | Quote | Chart | News | PowerRating) said as part of its five-year partnership deal with software developer Novell Inc. (NOVL | Quote | Chart | News | PowerRating) it will invest an additional $100 million to buy redeemable certificates for expanded support from Novell to run their products together.

Also, industry data released on Wednesday showed that mortgage application volume declined last week due in part to a 3.7 percent decline in refinancing activity.

The major averages rallied in the final hour of the session, sending the averages back into positive territory. The Dow closed up 68.88 points or 0.6 percent at 11,417.43, the Nasdaq closed up 4.72 points or 0.2 percent at 2,389.08 and the S&P 500 closed up 7.85 points or 0.6 percent at 1,274.54.

In economic news, Indian firm Punj Lloyd has jointly bid with Italy's Eni to build Singapore's first chilled gas import terminal, the Economic Times reported on Wednesday. Others in race to build the terminal are consortia of KBR Inc, Samsung Corp and Kogas Technology, Korean firms SK Gas and LG Corp, and Technip with Daewoo. Singapore expects initially to import 0.8 to 1.2 million tons per year of LNG by 2012 through its planned import terminal on Jurong Island, building up to 3.0 million tons per year by 2018.

In corporate news, telecom firm StarHub Ltd will lead the consortium bidding to build the city-state's next-generation broadband network, the company said on Wednesday. StarHub replaces Hong Kong's City Telecom, which has dropped out. Qatar Investment Authority, the Middle Eastern state's investment vehicle, has also joined the consortium, the statement said.

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