Singapore Stocks May Fade Again On Monday

(RTTNews) - After barely halting the four-day losing streak that had cost it nearly 120 points or 5 percent, the Singapore stock market turned right back to the downside on Friday - falling through support at 2,300 points. And the Straits Times Index is unlikely to reclaim that mark on Monday, analysts say, instead extending recent losses.

The global forecast is ominous for the Asian markets. The U.S. government's long-awaited rescue package for the beleaguered financial sector made it through Congress and was quickly signed into law by the president - but the U.S. markets plunged on the news as investors locked in gains from earlier in the session. The Asian bourses may also see some consolidation over the uncertainty of the rescue plan's effects and profit-taking.

The STI finished sharply lower on Friday as the property sector posted major declines, while the financial stocks also took a significant hit. For the day, the index plummeted 66.48 points or 2.81 percent to close at the daily low of 2,297.12 after peaking at 2,336.01. About 1.09 billion shares exchanged hands, with losers beating gainers 302 to 137.

Wall Street provides a sharply negative lead as U.S. stock markets ended a volatile session sharply lower as investors reacted to the House's vote to pass the government's $700 billion bill to rescue the troubled credit markets. The Dow ended the session down more than 150 points after soaring 300 points.

Earlier in the day, the House of Representatives passed a measure to allow the Bush Administration to buy up to $700 billion in mortgage-backed securities in an effort to bring stability to financial institutions and unfreeze credit markets. The financial rescue package is essentially identical to a measure that failed in the House Monday, with the addition of provisions to increase FDIC insurance caps from $100,000 to $250,000.

The rescue package was also tied to a broad range of tax cuts for alternative energy, a fix to the Alternative Minimum Tax and a series of other personal and business tax cuts. The combination, along with reports of the effects of the credit crunch spreading beyond Wall Street to make car and student loans more difficult to obtain and tales of businesses losing operating lines of credit, proved enough to bring more support for the measure from both parties. President George W. Bush quickly signed the bill into law.

Also, the Labor Department released its monthly report on the employment situation - which said that employment fell by more than expected in September, although the unemployment rate remained unchanged at 6.1 percent from the previous month. Non-farm payroll employment fell by 159,000 jobs in September compared to a revised decrease of 73,000 jobs in August. Economists had expected employment to fall by about 100,000 jobs compared to the decrease of 84,000 jobs originally reported for the previous month.

The major averages saw additional selling pressure in late day trading, closing near their intraday lows. The Dow set a two-year closing low, closing down 157.47 points or 1.5 percent at 10,325.38. The Nasdaq set a three-year closing low, closing down 29.33 points or 1.5 percent at 1,947.39, while the S&P 500 set a three-year closing low, closing down 15.05 points or 1.4 percent at 1,099.23.

In economic news, Singapore's Urban Redevelopment Authority announced in a flash estimate that private residential property price index decreased 1.8 percent to 174.3 points in the third quarter, in contrast to the 0.2 percent rise recorded in the previous quarter. In the third quarter, prices of non-landed private residential properties fell 2 percent in core central region and dropped 2.1 percent in rest of central region. At the same time, prices of non-landed properties rose 0.1 percent in outside central region.

In corporate news, the Malaysia government hopes to reduce international mobile roaming charges between Malaysia and Singapore by 2009. Presently, the rates range from 30 sen per minute to RM1, depending on the service provider and which plan the customer signed up for. Singaporeans who visit Malaysia will also be able to take advantage of the lower rates. Plans for reduced roaming charges within ASEAN are also in the works, the report said.

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