The Singapore stock market has closed lower now in back-to-back sessions, giving away almost two dozen points or 0.9 percent along the way. The Straits Times Index finished just above the 2,735-point plateau, and now investors are looking for a modest rebound when the market opens on Monday.
The global forecast for the Asian markets is cautiously optimistic on bargain hunting following heavy damage through much of last week. Positive economic data from China over the weekend adds to the positive sentiment, with better than expected numbers for exports, trade balance, inflation, retail sales and industrial output. In addition word comes from Europe that Spain will accept a bailout of $125 billion for its ailing banking sector, which investors hope will bring stability to the embattled Eurozone.
The STI finished modestly lower again on Friday following losses from the financial shares and the plantation stocks.
For the day, the index dropped 21.37 points or 0.77 percent to finish at 2,737.89 after trading between 2,735.59 and 2,760.25 on volume of 918 million shares. There were 235 decliners and 87 gainers.
Among the decliners, United Overseas Bank shed 0.7 percent, while DBS Group lost 1.3 percent, Oversea-Chinese Banking Corp. eased 0.2 percent and Olam International fell 2.7 percent.
The lead from Wall Street is firmly positive as stocks showed a significant turnaround over the course of the trading day on Friday after coming under pressure in early trading as traders expressed renewed optimism about the financial situation in Europe.
The early weakness was partly due to waning optimism about the possibility of further stimulus from the Federal Reserve following Fed Chairman Ben Bernanke's testimony before the Joint Economic Committee on Thursday. While Bernanke said that Fed "remains prepared to take action" if the economic situation worsens, he made no explicit reference to further easing measures.
Disappointing trade data from Germany also contributed to the initial downward move, with the Federal Statistical Office reporting a 4.8 percent drop in imports in April.
The subsequent turnaround by the markets was partly due to optimism about the outcome of a weekend meeting of European financial officials, with rumors correctly suggesting that Spain could be in line for a bailout.
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