Big Drop Tuesday

Singapore stock market took quite a hit today, ouch... Main reason for this was over worries in USA about a fallout in their subprime mortgage market weighing on investor confidence. Another testament of how investor sentiment can move and shake markets. DBS Vickers reports that we can expect the market to be soft for the earlier part of this week, but there may be recovery towards the end.

In Singapore though, good news regarding the manufacturing sector may do well to boost local sentiment so we may see a bit of recovery tomorrow. However all these would be weighed by how the other overseas markets do over the next couple of days. A lot will also hinge on the Federal Open Market Committee meeting.

Current mood: Highly Cautious

Taken from the Business Times 26th June 2007

SINGAPORE - Singapore share prices closed 1.54 per cent lower on Tuesday as players turned cautious a day before the two-day US Federal Open Market Committee meeting, dealers said.

The Straits Times Index closed down 55.23 points at the day's low of 3,525.10 on volume of 3.89 billion shares worth $2.35 billion (US$1.54 billion).

Losers beat gainers 756 to 157, with 601 unchanged issues.

'This correction is quite healthy but 3,500 points should hold as a support for the index,' said a local brokerage dealer who declined to be named.

'It's most likely we will consolidate for another couple of weeks, with people looking to corporate results for guidance when the (June quarter) earnings reporting season starts in the middle of next month,' he added.

Most analysts expect the Fed to keep its key short-term fed funds rate pegged at 5.25 per cent, where it has been for a year, after the meeting which begins on Wednesday.

Weighing on the main index were property stocks, as some investors cashed in gains from the recent rally in the sector.

Leading the pack was UOL Group, which fell 0.25 to $5.65. CapitaLand dropped 0.25 to $7.80, and Keppel Land shed 0.20 to $8.85.

Bank stocks also declined, with Oversea-Chinese Banking Corp down 0.15 at $9.10, United Overseas Bank down 0.50 at $22.30 and DBS Group shedding 0.30 to $23.10.

Blue chips were likewise sold off, with Singapore Airlines down 0.10 at $18.70, Singapore Press Holdings losing 0.08 to $4.56 and ST Engineering down 0.14 at $3.60.

Keppel Corp was down 0.30 at $12.30. -- AFP