Stock exchange in Singapore potentially to withdraw support at the 4,200-point mark
Singapore Stock Market Braces for Cautious Trading on Tuesday
The Singapore stock market is expected to remain under pressure or see cautious trading on Tuesday, following a 0.6% drop on Monday. This decline is influenced by the subdued global outlook for Asian markets, which is soft ahead of key U.S. inflation data [1].
The Singapore stock market finished lower in two consecutive sessions, losing more than 25 points or 0.6 percent. The Straits Times Index (STI) currently hovers just above the 4,230-point plateau. Notable performers on Monday included CapitaLand Ascendas REIT, which dropped 0.74 percent among the actives, while CapitaLand Integrated Commercial Trust gained 0.44 percent. SembCorp Industries plummeted 3.42 percent among the actives [1].
The recent decline in the Singapore market reflects the impact of soft global cues and lingering concerns about a slowing U.S. economy, elevated inflation, and geopolitical risks, which collectively weigh on sentiment [1]. Despite these short-term concerns, analysts have raised profit forecasts and target prices for certain Singapore stocks, suggesting selective opportunities may exist even amid broader weakness [2][3].
The soft global outlook for Asian markets generally results in dampened investor appetite, contributing to immediate downward momentum. This may lead to further cautious trading until more positive catalysts emerge [1]. Singapore stocks have seen some support from safe-haven flows amid global uncertainties; however, risks such as rising recessionary or stagflationary tendencies in the U.S. economy and geopolitical fragmentation remain prominent, possibly causing pressure on the market going forward [1].
In other news, crude oil increased on Monday, with West Texas Intermediate crude for September delivery reaching $64.05 per barrel, up $0.17 or 0.27 percent. The Labor Department's report on consumer price inflation in the month of July is likely to be in focus later today.
Later this morning, Singapore will release Q2 numbers for gross domestic product. The Federal Reserve is predicted to lower interest rates by a quarter point next month, according to CME Group's FedWatch Tool, with an 86.5 percent chance [1]. However, the impact of these monetary policy decisions on the Singapore stock market remains to be seen.
The caution on the Singapore Stock Market might persist due to the impact of soft global cues on the finance sector, potentially affecting investing decisions in the industry. Despite some support from safe-haven flows, business activities could still be affected by geopolitical risks and economic uncertainty in the US.
