Tuesday, May 15, 2012

Market Summary -- 15th May 12

FTSE STI closed 2,876.70, up 12.58 points or +0.44% with a total volume of 1.64b and a total value of S$1.19.  Total number of advance vs decline was 200 vs 180.  Of the 30 component index stocks, 18 closed positive, 7 closed negative and 5 remained unchanged.  The top 5 gainer component stocks were :-

1. JMH 400US$  +0.340
2. JSH 500US$  +0.230
3. UOB  +0.210
4. KepCorp  +0.190
5. SembCorp  +0.110

The top 5 loser component stocks were :-

1. Jardine C&C  -0.530
2. Olam  -0.030
3. Genting SP  -0.015
4. ST Engg  -0.010
5. SIA Engg  -0.010
5. CapMallsAsia  -0.010

US markets fell average 1% yesterday night as development in Greece caused investors to worry about Greece exit of Euro and default and at the same time the JP Morgan trading loss of US$2b still weigh on investors fearing other banks might have similar issue.  Asian bourses were under selling pressure for most of the times and closed mixed with Nikkei -0.81%, SSE -0.25% and HSI +0.81%.  STI managed to recover from earlier loss and closed positive with a 0.44% in a moderate volume day.  18 of the index stocks component stocks managed to register positive closing.

Greece failing to form coalition government and fear of exit Euro and default spooked investors or maybe just a over panic reaction as all along the talk of Greece leaving Euro and default is there.  Greek President proposed forming a government with technocrat but was shot down by Greek leftists.  Should Greece still fail to form a government by this week, a mid-June election will be held.

Some of the Asian bourses managed to rebound and close positive mainly due to report that Germany 1Q GDP showing it manages to escape a recession and that caused short-covering of blue chips which pushed up the index.  A technical rebound might be on the way but don't expect too much from it.  Market could only bottom and reverse if there is positive development from EU probably in June when EU Summit is to be held and focus on the austerity vs growth issue.

Most of the defensive stocks in STI have been resilient for past weeks but some selling pressure were detected and that could be funds cashing out.  If nothing exceptional occurs, that could be the last round of selling off before market bottom.  Stocks mostly are pulling back to test first level of support and that looks a bit shaky and could go down further to test the second support which is firmer.  For STI perspective, there is a possibility of another 3% drop from current level.  From events perspective, EU Summit and US Fed meeting in June could be the game changers for global stock markets.

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