Market Summary 7 July 2012

Singapore's shares logged their eighth straight session of gains Friday as some investors took monetary policy easing in Europe and China as a sign that governments stand prepared to take steps to boost economic growth.

The 30-share Straits Times Index gained 0.2%, or 7.08 points, to close at 2,978.55. The benchmark had started the day in the red and sentiment stayed depressed for most of the session as investors were worried that policy makers are growing increasingly gloomy about growth. However, sentiment picked up toward the end of the session as investors continued to see value in the nation's stocks. The benchmark finished the week with a 3.5% gain.

Volume was lightly higher Friday, at 1.50 billion shares compared with 1.46 billion Thursday. Gainers outnumbered losers 238 to 137.

The European Central Bank's move to lower borrowing costs was widely anticipated by the market, but China rate cut Thursday came as something of a surprise. The moves "have in essence given traders a greater puzzle to solve in regards to whether being long, short or sidelined is the smart choice," said Tim Waterer, senior trader at CMC Markets, in a note.

Global markets now await U.S. non-farm payrolls data set to be released later in the global day, with economists expecting a gain of as many as 100,000 new jobs in June. The crucial jobs report is likely to hold clues about the possibility of a third round of quantitative easing by the U.S. Federal Reserve. "If we do see a soft payrolls number, how much heart the market takes from an increased likelihood of QE3 will be critical," said Waterer.

Some real-estate firms continued their winning streak Friday as lower interest rates are likely to boost sales. CapitaLand gained 2.8% to close at S$2.98, making it the biggest gainer on the benchmark, while CapitaMalls Asia added 0.3% to close at S$1.625.

DBS Bank gained 0.6% to close at S$14.09 after the government announced a banking cooperation agreement with China. Under the agreement, China will expedite processing of applications made by Singapore banks to establish branches and sub-branches in the country, according to a Singapore government statement. Implementation details will be worked out by the relevant financial agencies in Singapore and China in due course, the statement said, without naming any banks.

Golden Agri-Resources gained 1.4% to close at S$0.720 but other commodity suppliers were lower after gaining in recent sessions. Noble Group closed 1.3% lower at S$1.135 while Wilmar International lost 0.5% to close at S$3.66.