(RTTNews) - The Singapore stock market has finished lower in two of the last three sessions, giving up more than 20 points or 1.3 percent in that time. The Straits Times Index gave up support at 1,700 points, and analysts are expecting those losses to accelerate when it kicks off trade on Tuesday - perhaps testing the 1,600 plateau.

The global forecast for the Asian markets is sharply negative as economic data confirmed that the United States is indeed in a recession and has been for a year - heightening fears that the recession will grow worldwide and last for several years. The U.S. markets responded to the news with heavy losses that also were a bit of correction following major gains last week. The Asian bourses are also expected to move significantly to the downside.

The STI finished sharply lower on Monday, with the battered financials leading the decline. For the day, the index plummeted 42.34 points or 2.44 percent to close at the daily low of 1,690.23 after peaking at 1,724.57. Volume was 945 million shares worth 745 million Singapore dollars.

Among the actives, DBS, United Overseas Bank and Oversea-Chinese Banking Corp all finished sharply lower, while Singapore Telecommunications also finished the session lower. Bucking the trend, Singapore Airlines added modest gains to finish higher.

Wall Street offers a broadly negative lead as stocks moved sharply lower over the course of the trading day on Monday after turning in a strong performance last week. The major averages showed a steep drop at the open and continued lower throughout much of the session. The initial weakness came as investors took profits following the substantial gains seen last week, with the markets seeing further downside as investors reacted to some negative economic news as well as speeches from both Fed Chairman Bernanke and Treasury Secretary Paulson.

On the economic front, the Institute for Supply Management’s index of activity in the manufacturing sector fell to 36.2 in November from 38.9 in October, with a reading below 50 indicating a contraction in the sector. With the decrease, the index fell to its lowest level since May of 1982. Separately, the Commerce Department released its report on construction spending in the month of October, showing that spending fell by more than expected amid a notable decrease in spending on residential construction.

Speaking at an event hosted by the Greater Austin Chamber of Commerce in Austin, Texas, Federal Reserve Chairman Ben Bernanke said that further interest rate cuts from already low levels were “certainly feasible,” but he warned that the impact from any additional rate cuts would be “limited.” Bernanke said that the financial markets are better off for the moves authorities have taken lately, but he noted that absolute stability would take some time. He also predicted that the economy would likely remain weak for some time.

In his speech, Treasury Secretary Henry Paulson said that government actions taken to combat the financial crisis have made progress, though he noted that there is still much improvement that needs to be made. Paulson, who will be replaced as Treasury Secretary by New York Fed President Timothy Geithner when the next presidential administration takes over in January, also said that the government remains active in developing new programs.

The major averages saw some further downside going into the close of trading, ending the day at or near their worst levels of the day. The Dow closed down 679.95 points or 7.7 percent at 8,149.09, the Nasdaq closed down 137.50 points or 9.0 percent at 1,398.07 and the S&P 500 closed down 80.03 or 8.9 percent at 816.21.

In economic news, Singapore is on Tuesday scheduled to release November numbers for PMI and electronics PMI. The electronics PMI is expected to show a score of 47.6, easing from 49 in October. Minus electronics, PMI is seen at 43.8 - down from 45.8 in the previous month.

For comments and feedback: contact editorial@rttnews.com

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Posted in Categories: Releases, Stocks, USA.

Subscribe by RSS Subscribe by Email