Thursday, June 6, 2013

Market Summary -- 6th Jun 13

FTSE STI closed 3,193.51, down 49.92 points or -1.54% with a total volume of 2.47b and a total value of S$1.66b.  Total number of advance vs decline was 80 vs 317.  Of the 30 component index stocks, 2 closed positive and 28 in the red.  The 2 gainer component stocks were :-

1. SIA Engg  +0.040
2. HKLand US$  +0.020

The top 5 loser component stocks were :-

1. JMH 400US$  -0.980
2. Jardine C&C  -0.490
3. UOB  -0.450
4. DBS  -0.380
5. CityDev  -0.230

US markets fell at least 1% yesterday after the ADP data missed expectation.  Asian bourses taking the cue continued the selling down from past days.  Nikkei -0.85%, SSE -1.12% and HSI -1.05%.  STI under-performing regional bourses with a 1.54% drop in thin volume and value day.  Only 2 of the 30 index stocks registered positive closing.

A below expectation ADP data caused concern that this Friday non-farm payroll data would be bad but so far the correlation between ADP and actual non-farm payroll wasn't quite a close one from past history.  Here is the interesting point, should non-farm payroll not getting better this would indicate US Fed would have to hold off any tapering off soon.  Such a move isn't what most investors are hoping for ?  Markets sell down is for a fair valuation adjustment and lot of excuses could be used to justify that such that fear of US Fed tapering and weak economic data.

STI continued under selling pressure with short selling and day traders in the act.  Funds who wished to sell mostly sold last month.  As more and more piling on selling and short selling, the reversal point will come soon and rebound will be a sharp one as panic short-covering would have pushed up the prices.  Within 2 weeks global markets should start rebounding as after so many days of selling and prices dropping, fair to cheap valuation will emerge to attract bargain hunting and those funds who sold last month will see opportunity to re-enter.

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