Monday, June 24, 2013

Market Summary -- 24th Jun 13

FTSE STI closed 3,074.31, down 50.14 points or -1.60% with a total volume of 2.07b and a total value of S$1.37b.  Total number of advance vs decline was 76 vs 354.  Of the 30 component index stocks, 1 closed positive and 29 in the red.  The only gainer component stocks were :-

1. Jardine C&C  +0.050

The top 5 loser component stocks were :-

1. UOB  -0.400
2. OCBC  -0.240
3. Kep Corp  -0.230
4. JSH 500US$  -0.210
5. DBS  -0.170

US markets closed mixed last Friday but Asian bourses were under another round of selling pressure for the day.  Nikkei -1.26%, SSE -5.29% and HSI -2.22%.  STI tracking regional bourses fell 1.60% in thin volume and value day.  Only 1 of the 30 index stocks managed to register positive closing.

The reason for the continuation of selling was concern of China credit squeeze in which the PBOC not keen to inject more liquidity.  That together with the ongoing concern of US Fed tapering put the selling pressure on Asian bourses in which SSE plunged more than 5%.

STI has a sluggish start failing to track the stabilize movement of US market.  The China concern together with another missed in CPI coming in +1.6% on year vs +1.2% triggered off selling across the broad.  Those are "valid" reasons to sell but not a mandatory one to oversold as the global fundamental has not changed much.  Investors might have to start to shift their mindset on China growth could be potentially to be 5% to 6% due to fundamental shift in global economy.  US Fed tapering as mentioned before does not mean end of the world.  Global events are moving towards back to their prior equilibrium rather than moving away from it.  Majority should not be aware of it and hence causes the over-reaction.  Nevertheless, the over-reaction will always present will great opportunity.  After this month, earning season will start again, that is something to look forwards to to give a judgement of corporate fundamental vs market sentiment.

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