Friday, April 27, 2012

Market Summary -- 27th Apr 12

FTSE STI closed 2,981.58, up 0.11 points or 0% with a total volume of 3.34b and a total value of S$1.27b.  Total number of advance vs decline was 122 vs 310.  Of the 30 component index stocks, 11 closed positive, 3 remained unchanged and 16 closed negative.  The top 5 gainer component stocks were :-

1. Jardine C&C  +0.680
2. UOB  +0.420
3. DBS  +0.280
4. SIA Engg  +0.020
5. StarHub  +0.020

The top 5 loser component stocks were :-

1. JMH 400US$  -0.250
2. JSH 500US$  -0.220
3. CityDev  -0.170
4. KepCorp  -0.090
5. HKLand US$  -0.090

US markets continued to advance yesterday with at least 0.60% gain after better than expected corporate earnings and home sales data offsetting concern on EU debt crisis.  However, after market closed, S&P downgraded Spain's credit rating but 2 notches with negative outlook.  Asian bourses were weighed on with the downgrading resulting in mostly close in the red.  Nikkei closed -0.43%, SSE -0.35% and HSI -0.33%.  STI swinging between gain and loss closing flat in another over 3 billion volume day.  11 of the 30 index stocks managed to register positive gain.

The downgrading of Spain's credit rating weighed on investors that Spain's austerity measures is not working to cut its debt and concern of whether Spain need a bailout could be resurfacing in the next few week.  However, do note that S&P has a record of behind the curve in reacting to the rating.  The EU crisis has been dragging on and on for past 2 years and with debt nations restoring to austerity measures, trading off growth in the process is inevitable, there should be a time when the impact of the austerity measures hit the hardest and that probably is the end of the worse of the debt reduction.  Do keep a lookout for such scenario.

Singapore DBS bank reported a better than expected set of earning this morning and with that sentiment spreading to UOB, both DBS and UOB share price up at least 2% cushion the impact of the dropping STI resulting in STI performed better than regional bourses.  OCBC was down mainly due to Ex-Dividend.  As more and more blue chips, index stocks are going on Ex-Dividend next week, the pressure for STI to perform is there.  Most of the activities still circle around the penny and investors who punting for quick profit on the penny better be careful now.  So far majority of the companies reported on their earning have been firm and investors should taking cue from those result and focus on the fundamentally solid stocks and wait for weakness to accumulate.

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