Thursday, June 21, 2012

Market Summary -- 21st Jun 12

FTSE STI closed 2,830.15, down 25.53 points or -0.89% with a total volume of 1.21b and a total value of S$891M.  Total number of advance vs decline was 129 vs 193.  Of the 30 component index stocks, 4 closed positive, 2 remained unchanged and 24 closed negative.  The t4 gainer component stocks were :-

1. Jardine C&C  +0.310
2. JSH 500US$  +0.070
3. SIA  +0.030
4. CapitaMall  +0.010

The top 5 loser component stocks were :-

1. UOB  -0.400
2. JMH 400US$  -0.350
3. Olam  -0.105
4. F&N  -0.100
5. KepCorp  -0.090

US markets closed mixed, flat and mostly down after outcome of US Fed FOMC meeting maintaining low interest rate, cut economic forecast and extending Operation Twist for another 6 months till end of the year.  Asian bourses were mixed for the day with Nikkei closed +0.82%, SSE -1.40% after HSBC released flash reading of the PMI at 48.1 and HSI -1.30%.  STI closed down 0.89% in moderate volume and total value again came in below S$1b.  Only 4 of the 30 index stocks managed to register positive closing.

As mentioned, don't bet on US Fed stimulus of QE3 and as mentioned by US Fed's Chief comment, US Fed has done whatever it could to help the economy and it is the turn for the lawmakers to do their parts.  For those who labour a QE3 better ask yourself is it good for US economy ( since QE1 and QE2 did nothing at all ) or just for selfish reason as there will be cheap and easy money to punt in the stock markets to achieve gain.  The game changer for US economy will only be when the lawmakers finally wake up their idea and decide to act.

HSBC preliminary release of the flash PMI for June indicating China manufacturing activities continued to shrink for the eighth month and that weighed on investors for today apart from the disappointment from the outcome of US Fed meeting.  While STI might be down, observations were stock prices were in range bound mode probably have an eye towards end of the month 1H window dressing and next week EU Summit.  Any dip will be opportunity to collect for EU Summit, 1H window dressing and earning season next month.  Target those fundamental strong stocks with past 2 quarters giving resilient earning.

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