FTSE STI closed 3,156.55, up 14.98 points or +0.48% with a total volume of 2.20b and a total value of S$1.08b. Total number of advance vs decline was 230 vs 158. Of the 30 component index stocks, 9 closed negative, 2 unchanged and 19 closed positive. The top 5 gainer component stocks were :-
1. JMH 400US$ +1.350
2. JSH 500US$ +0.990
3. CityDev +0.140
4. SembCorp +0.09
5. KepCorp +0.070
The top 5 loser component stocks were :-
1. StarHub -0.080
2. Capitaland -0.030
3. Olam -0.025
4. SIA Engg -0.020
5. Wilmar -0.020
US markets gave up earlier gain and closed flat after US Fed outcome. Asian bourses were mixed for the day with Nikkei +1.68%, SSE -1.02% and HSI -0.26%. STI outperformed most regional bourses with +0.48% in heavy volume but thin value. 19 of the 30 index stocks registered positive closing.
US Fed maintained low interest rate until 2015 but there was a change in pegging the interest rate to events rather then time frame. Criteria were unemployment rate drops to 6% and inflation below the 2.5% target. Apart from that it also expanded its stimulus program (after the expiring of Operation Twist at end of this month) with a $45b per month bond buying. Again, it is going to peg to US economy instead of time frame. However, the hard wording of US Fed could do nothing to avoid the fiscal cliff should Congress could not come out a deal by end of this month sent some fear to investors and caused markets to give up all of earlier gain. The US Fed rolling out more stimulus was just another of the feeling good effect. The underlying remains true that US economy still very weak and too aggressively rolling out stimulus will eventually backfire. An example was China in 2008 with its huge and aggressive stimulus and in the end it needed almost 2 years to fight inflation. As for the US fiscal cliff issue, still no words from Congress whether what and when the deal will be done.
Asian bourses earlier part cheered of US Fed stimulus program but soon turned cautious and closed mixed. STI hit another new 52-week high but the strength lacked convincing. There wasn't any of big quantity transaction on close for those fund stocks today and that could signal fund managers might be reaching the end of book closure for the year activity. As usual most of the heavily traded stocks were the penny and micro-penny stocks in which the fund managers got nothing to do with it. EU will be having a EU Summit soon and focus could be temporary shifted there as investors are looking at possible detail of the formation of EU Banking Unions.
Advise for investors would be now staying in cautious mode.
