Policy moves and data to take centre stage
APART from changes in the MSCI Singapore Index, which helped propel turnover on Tuesday to $1.8 billion, the highest one-day total this year, the local stock market ended a largely uninspiring week up 9.54 points on Friday to 3,350.50, bringing a five-point gain for the week.
Still, some market participants hold out hope that the coming months will deliver the fabled Capricorn effect that lifts stocks at the start of a new year.
After all, banks and some blue chips have already helped to lift the value of the Singapore stock market out of a three-month slump last month.
The total market capitalisation of Singapore-listed stocks rose 1.2 per cent last month from October to $956.5 billion, the first improvement since July, when market cap had grown by 1.3 per cent to $978.7 billion.
The value is up 6.3 per cent from last December's $899.4 billion.
Traders are also pinning expectations of a stock market boost on central banks in Japan and the euro zone, which are ramping up monetary stimulus measures in order to drive up inflation.
Of course, slumping oil prices are making their work much harder. Brent crude, a global benchmark for oil prices, touched a low of US$71.12 a barrel after settling at a four-year closing low on Thursday, when Saudi Arabia blocked calls from the Organisation of Petroluem Exporting Countries oil cartel to cut production to stem the price slide.
Although lower oil prices help support economic growth, they may undermine efforts to avert deflation in Japan and Europe.
"Whatever positive connotations lower energy (prices) might have for global growth, the extent and pace of the decline in oil seems the more worrying factor for the moment," said Michael Turner, a strategist with RBC Capital Markets.
This week, the Bank of England's monetary policy committee is expected to keep its benchmark interest rate at a record low, with governor Mark Carney saying the economy still requires stimulus.
European Central Bank policymakers are also assessing the impact of stimulus measures started in recent months and will release revised economic forecasts.
Japan is releasing companies' capital spending, profit and sales data for the third quarter, which will be used to revise third-quarter economic growth, while China's manufacturing purchasing manager's index for last month and Hong Kong's October retail sales are also due out.
Market participants are also watching for the upcoming meeting of the Federal Open Market Committee (FOMC), which in October took the momentous step of drawing to a close its crisis-era stimulus programme.
The minutes made clear there was little thought of departing from current policy, including keeping the benchmark interest rate at zero, well into next year. Most analysts had forecast initial hikes around the middle of next year.
An intense debate is expected on Dec 16 and 17 on refining the interest rate signals, traders said. This week, cues would come from a United States Labour Department report on jobs.
Employers are expected to have added more than 200,000 jobs last month as the US closes in on its strongest year for payroll gains since 1999, according to a Bloomberg survey. The jobless rate is projected to drop to 5.7 per cent from 5.8 per cent in October.
Also due out is the Fed Beige Book survey of regional economies, which will give the FOMC anecdotal information about the economy before its upcoming meeting. Interest-rate decisions will be made in the euro region, Britain, Australia, Canada, Mexico and Brazil.