Global markets turned in a strong performance last week as sentiments were boosted by the United States Federal Reserve's recent strong hints that rate hikes will be gradual rather than steep while the European Central Bank (ECB) looks set to roll out further stimulus.
However, the euphoria has not spilled over to the local market, which approaches its typical year-end lull on a cautious mood.
Following the latest Fed meeting minutes last Wednesday that all but confirmed a rate hike next month, ECB president Mario Draghi said last Friday that the bank is ready to "do what we must to raise inflation as quickly as possible".
Traders liked what they heard from the developed markets, and New York's Dow Jones Industrial Average gained 3.4 per cent for the week, helping the US benchmark erase its year-to-date loss. The pan-European index FTSEurofirst 300 also put on over 3 per cent, its best week in a month.
There was also good news in Asia, with the People's Bank of China cutting lending rates last Thursday in a bid to boost business liquidity. In response, Shanghai and Shenzhen rose 0.37 per cent and 1.27 per cent, respectively.
But Singapore did not share the excitement, with the Straits Times Index (STI) easing 0.07 per cent last Friday and 0.27 per cent for the week. Turnover has remained weak, with blue chips trading consistently at below the 300-million share level.
IG market analyst Bernard Aw said that while investors here are obviously keeping a close eye on macroeconomic developments in the US and Europe, large movements in stock prices in Singapore are unlikely as the market heads towards the end of the year.
"December is typically a quiet period, not to mention investors are still waiting on the side for more definite signs of improvements in the macro-environment.
"Before the actual announcement of rate hikes in the US next month, I think it may be difficult for the STI to retake the 3,000 level," Mr Aw said.
One thing that is still bugging the market is the weak oil price.
Brent crude futures currently remain under US$45 a barrel, showing no sign of firm recovery since the minor rally to above US$60 a barrel in the second quarter.
Market watchers will be looking at the next Opec (Organisation of Petroleum Exporting Countries) meeting on Dec 4 in the hope that the major producers are willing to cut production and prop up prices.
But news that Iran plans to add one million barrels a day to Opec's production following the lifting of international sanctions on the country has further complicated the outlook.
Meanwhile, the persistent market headwinds have not been kind to the marine and energy plays in Singapore, such as Sembcorp Marine, which has pared some 16 per cent in the past month to $2.14 at last close.
Others in the sector were similarly struggling, with Keppel Corp losing 8 per cent in the past month to $6.71, while Ezra Holdings has dropped 17 per cent to 10.7 cents in the period.
SembMarine had both good news and bad news for its shareholders last week. Just as it won a contract to design and build a new vessel for Modec, it was hit by Marco Polo Marine's cancellation of a US$214 million (S$303 million) contract.
A tiff is unfolding between SembMarine and Marco Polo, which claimed that SembMarine did not comply with material contract obligations. SembMarine has refuted Marco Polo's allegations, calling the cancellation a repudiatory breach of contract. The rig-builder said it would terminate the contract and claim other amounts due, as well as take "the necessary steps to enforce its rights".
"But even if Sembcorp Marine did not breach its contract obligations, we worry that other weak clients may follow Marco Polo's actions," Maybank Kim Eng analyst Yeak Chee Keong said in a recent note.
"Sembcorp Marine has five other rigs that could also be at risk. Delivery dates for these units have been deferred for now," noted Mr Yeak, who has a sell call on the rig-maker.