DOUBTS over the pace of the global economic recovery will be something Singapore investors will continue to wrestle with this week.

All eyes will be on today's trading day, as Singapore and other Asian markets react to the United States employment news released last Friday.

On the one hand, the US economy saw a higher-than-expected loss of 20,000 jobs last month. On the other hand, the unemployment rate fell to 9.7per cent instead of registering a slight uptick.

These mixed signals from two of the most closely watched indicators of US economic activity make it difficult to gauge the level of recovery.

The Singapore market will likely take its cue from the Dow Jones Industrial Average, which was weak for most of last Friday. At one stage, it even sank below the 9,900 level, but clawed back all its losses in the last hour of trade to end above the key psychological 10,000 mark.

The Dow closed 0.1 per cent higher at 10,012.23, but was 0.5 per cent lower for the week.

The local market will also be keeping a close eye on the European economies, where the mounting debt problems of Greece, Spain and Portugal are giving investors cause for concern.

With the benchmark Straits Times Index closing at 2,683.56 points last Friday - the first time it has fallen below the 2,700 level since Nov 9 - economic concerns are clearly at the forefront of investors' minds.

The week's loss was 61.79 points or a 2.2per cent decline. This marks the fourth consecutive weekly decline for the index.

Mr Kevin Scully, executive chairman of boutique corporate finance firm NRA Capital, said: 'The correction is not totally unexpected. The fiscal stimulus measures rolled out by governments

during the financial crisis are being cut back. Liquidity is being taken out of the system.'

However, he added that much will depend on the current corporate earnings season to demonstrate if the macro-economic fundamentals are in place.

If companies report growth in earnings, then the current correction 'provides a buying opportunity. Investors don't have to pay a liquidity premium'.

The large companies that have reported fourth-quarter earnings include Keppel Corp and DBS Group Holdings.

Keppel reported that fourth-quarter profits had risen 30 per cent due to the recovery in the property market and better profits from oil margins.

DBS last Friday said fourth-quarter net profit had jumped 67 per cent to $493 million. Non-performing loans increased, but this was offset by improved fee income.

Some of the blue chips reporting results this week include SingTel, ComfortDelGro, CapitaLand and Neptune Orient Lines. Trading activity is likely to taper off towards the end of the week due to the upcoming Chinese New Year holiday.

sushyan@sph.com.sg