GDP Data Likely To Drag Singapore Stocks

(RTTNews) - The losing streak has reached four sessions now for the Singapore stock market, costing it more than 270 points or 14 percent along the way. The Straits Times Index is clinging to support at 1,600 points, and analysts say that the market could crash easily through that level when the market opens for business on Friday - particularly after Q3 data confirmed that Singapore is officially in recession.

The global forecast for the Asian markets is loaded with pessimism once again as data and events continue to point to a lengthy and deep worldwide recession. Weaker than expected unemployment data out of the United States further fueled those fears, as does the uncertainty surrounding the survival of the three largest producers in the American automobile industry. The European markets were down sharply, as was Wall Street - and the Asian markets are tipped to follow that lead.

The STI finished sharply lower again on Thursday, as the financial stocks fell under heavy selling pressure throughout the session. The property stocks also posted significant losses, as did the industrials.

For the day, the index lost 51.64 points or 3.1 percent to close at 1,613.95 after trading between 1,594.93 and 1,628.38. Volume was 950.5 million shares, with 324 decliners and 140 gainers. Among the decliners, UOB lost 5.0 percent, while DBS Group shed 3.6 percent and OCBC slid 3.4 percent.

The market inherits yet another horrific lead from Wall Street as ended Thursday's trading sharply lower following a late day sell-off after showing substantial volatility throughout the trading session. With traders reacting to disappointing economic data, the major averages all ended the session at multi-year closing lows.

Stocks showed a substantial decline in early trading following the release of a report from the Labor Department showing that first-time claims for unemployment benefits unexpectedly jumped to a sixteen-year high last week. The report showed that jobless claims for the week ended November 15th rose to 542,000 from the previous week's revised figure of 515,000. With the increase, jobless claims rose to their highest level since spiking to 564,000 in July of 1992.

Selling pressure waned not long after the open, however, and the markets moved back to the upside as traders went bargain hunting. Contributing to the recovery was a report of a compromise on a bailout of the three big U.S. automakers. But stocks turned lower after the Democratic leaders said that there would be no vote on a bailout for the automakers this week. Some reports have suggested that the bailout could be delayed until the new presidential administration takes office in January.

Stocks subsequently accelerated to the downside in the latter part of the trading day, with the major averages continually taking out their lows for the session. The major averages all closed sharply lower, with the Dow and the Nasdaq ending the day at their worst closing level since March of 2003 while the S&P 500 ended the session at its lowest closing level since April of 1997.

The Dow finished the session down 444.99 points or 5.6 percent at 7,552.29, while the Nasdaq closed down 70.30 points or 5.1 percent at 1,316.12 and the S&P 500 closed down 54.14 points or 6.7 percent at 752.44.

In economic news, the Singapore economy contracted by 0.6 percent in the third quarter of 2008 compared to the previous quarter, the Ministry of Trade and Industry said on Friday in its revised report, after the preliminary reading showed a 0.5 percent quarterly decline. On an annualized basis, GDP plummeted by 6.8 percent after a 5.3 percent decline in the second quarter.

As a result of the data, the ministry also lowered its growth forecast for 2008 to 2.5 percent, and also predicted a range of -1 percent to 2 percent for 2009. In addition, the ministry's CPI forecast was downgraded to 1 to 2 percent for 2009.

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