STI could possibly have a month end window dressing when the funds dress up their portfolio before the June holiday. Lately, global markets have been sold down due to concern of economic growth ( China and US ) and Europe's debts. Those are no new events. The concern of economic growth especially in Asian was there some 6 months ago when the Government put up several measures to curb inflation. Inflation might have peaked in 1H2011 so to allow the Government to re-focus back to growth in 2H2011. Europe's debts first surfaced last year with Greece, Ireland and Portugal all required bailout. This time round is about possible re-structuring of Greece's debt.
There is also concern what happens after QEII expires in June. With interest rate still low in US and Japan, cheap money still can easily borrow and hence the expiry of QEII might not have big impact to the stock markets. Recent corporate earnings for 1Q2011 still having companies doing well in their earnings.
Investors who are targeting the possible month end window dressing should focus on the blue chips that were badly sold down lately. However, must maintain cut loss policy for risk management.
