Singapore shares little changed on uncertain global economy

SINGAPORE - Shares here were little changed after investors digested mixed global economic news over the weekend.

The Straits Times Index (STI) crept up by a point on Monday to 3,403.9.

It traded in the red for most of the day, falling by as much as 13 points before a flurry of buying activity in the last 15 minutes of trade enabled the STI to close in positive territory.

Weak data from the United States and China, two of the world's largest economies, dampened investor sentiment.

Fourth-quarter gross domestic product in the US was downgraded to 2.2 per cent from an initial estimate of 2.6 per cent last Friday.

China, meanwhile, reported on Sunday that its official purchasing managers' index (PMI) contracted for a second month in February, with a reading of 49.9, below the 50 level that signals expansion.

But the downbeat news was countered by positive developments from Germany and monetary loosening measures in China, which gave markets here some support.

Germany reported on Monday that its February PMI for the manufacturing sector increased from January's reading of 50.9 to 51.1.

China's central bank also cut its the deposit and lending rates on Saturday, the second rate cut in three months, signalled the willing People's Bank of China (PBOC) to spur the economy.

"The lack of movement in the markets following the surprise rate cut from the PBOC is a sign of the task ahead," said Oanda Corp analyst Craig Erlam told Bloomberg.

"They clearly believe that this rate cut will be insufficient and much more needs to be done."

Despite the conflicting data, Asian bourses rose, clinging on to hopes that greater stimulus measures will boost stock markets.

Shanghai gained 0.8 per cent, Seoul rose 0.6 per cent, Hong Kong added 0.3 per cent and Tokyo was up 0.2 per cent.