Thursday, April 05, 2012

Singapore stocks slip as Fed stays quiet on stimulus

SINGAPORE: Singapore stocks slipped on Wednesday after minutes from the US Federal Reserve's latest policy meeting dealt a blow to hopes it will launch any new stimulus measures in the near term.

The 30-share ST Index fell below the 3,000-psychological support, closing 29.94 points, or 0.99 percent, at 2,985.04.

Volume fell to 1.69 billion shares from 2.63 billion shares on Tuesday, while decliners beat gainers 267 to 105.

United Overseas Bank shed 1.34 percent to S$18.39 while agri-business Wilmar International was down 1.02 percent to S$4.85.

Regional shares followed Wall Street lower on disappointment that markets will not be greased with any more cash as the Fed said it would play a wait-and-see game.

Tokyo tumbled 2.29 percent, or 230.40 points, to 9,819.99, Seoul was 1.50 percent, or 30.67 points, off at 2,018.61 and Sydney closed flat, edging down 3.1 points to 4,333.9.

Hong Kong, Shanghai and Taipei were closed for public holidays.

The Federal Open Market Committee's mid-March meeting minutes showed bankers considered improved employment, housing and financial market data as just "positive, on balance".

The committee made limited mention of monetary easing.

However, it said some members "indicated that the initiation of additional stimulus could become necessary if the economy lost momentum or if inflation seemed likely to remain below its mandate-consistent rate of two percent".

The news surprised many Fed watchers and hit Wall Street, with the Dow falling 0.49 percent, the Nasdaq down 0.20 percent and the S&P 500 off 0.40 percent.

"The decline in US stocks suggests that market participants may have expected the Fed to do more," said Eric Viloria, senior currency strategist at in a note.

"However, if the economy continues to firm as anticipated, the dip in equities may be seen as buying opportunities if the recovery becomes self-sustaining," he added, according to Dow Jones Newswires.

Eurozone fears resurfaced after Spanish unemployment hit a new high in March while other data showed the nation's public debt will soar more than 10 percentage points this year to 79.8 percent of gross domestic product.

The news stoked fears that another crisis similar to that of Greece was brewing in the eurozone.

And in Europe a poor debt auction by Madrid added to the woes on Wednesday.

The greenback bought 82.30 yen, down from 82.78 yen in New York late Tuesday - but well up from the 81.76 yen in Asia on Tuesday.

On oil markets New York's main contract, West Texas Intermediate crude for delivery in May, shed 60 cents to $103.31 per barrel. Brent North Sea crude for May settlement was down 31 cents at $124.55 in late afternoon.

Gold was at $1,633.75 an ounce at 1040 GMT, compared with $1,676.62 late Tuesday.

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Source From Channel News Asia

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