Wednesday, June 5, 2013

Market Summary -- 5th Jun 13

FTSE STI closed 3,243.43, down 47.92 points or -1.46% with a total volume of 3.35b and a total value of S$1.81b.  Total number of advance vs decline was 107 vs 321.  Of the 30 component index stocks, 2 closed positive, 1 unchanged and 27 in the red.  The 2 gainer component stocks were :-

1. Kep Corp  +0.060
2. SPH  +0.010

The top 5 loser component stocks were :-

1. JSH 500US$  -1.120
2. JMH 400US$  -0.850
3. Jardine C&C  -0.540
4. CityDev  -0.380
5. DBS  -0.220

US markets gave up earlier gain and closed down at least 0.5% after economists forecast US Fed could start tapering of stimulus in 3Q.  Asian bourses were mostly in the red with Nikkei -3.83%, SSE -0.03% and HSI -0.97%.  STI fell at 1.46% in a slightly lighter volume and value as past days with only 2 of the 30 index stocks registered positive closing.

US Fed tapering off stimulus is not something new and in fact they will one day do it when US economy is firm and the growth is able to sustain.  Global stocks markets reacted nervously with that not because fear of global economy going tailspin again but rather too much cheap money has been borrowed and it is a period of unwinding now.  Should global economy going into tailspin, Central Bankers will surely come in with monetary policies to support it.  This is the point in which investors have to be clear in the face of volatile market.  Today Japan PM Shinzo Abe unveiled his long term plan to boost Japan economy growth but investors were not at all pleased with it sending Nikkei to drop more than 3%.  More data to be look out for this coming days in particular US non-farm payroll this Friday.

STI fell on the open and at one point dropped almost 2%.  The selling pressure was there but what to look out for is oversold of fundamental.  This is the precise different between be able to read the market and not let the market read you and also staying outside of the box and not trap inside the box.

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