Thursday, August 1, 2013

Market Summary -- 1st Aug 13

FTSE STI closed 3,243.29, up 21.36 points or +0.66% with a total volume of 2.46b and a total value of S$970M.  Total number of advance vs decline was 214 vs 183.  Of the 30 component index stocks, 16 closed positive, 4 unchanged and 10 in the red.  The top 5 gainer component stocks were :-

1. Jardine C&C  +1.130
2. DBS  +0.540
3. UOB  +0.340
4. CityDev  +0.110
5. OCBC  +0.100

The top 5 loser component stocks were :-

1. JMH 400US$  -1.030
2. JSH 500US$  -0.280
3. SPH  -0.220
4. SIA  -0.050
5. Olam  -0.040

US markets closed flat yesterday giving up the gain soon after outcome of FOMC meeting.  Asian bourses were however positive for the day.  Nikkei +2.47%, SSE +1.77% and HSI +0.94%.  STI rose to 1% before trimming gain to close at +0.66% in a thin value day.  16 of the 30 index stocks posted gain.

Firstly, ADP report indicated US private sector hired 200k jobs for last month better than expected and GDP came in +1.7% also better than expected.  US Fed maintained low interest rate and produced another PR statement to defuse the question of when it will start tapering.  This time round, US Fed concerned of inflation is not meeting their target of 2% and cited that as reason to maintain monetary policy as the risk of disinflation could do harm to the economy recovery.  Whether it is another PR thing to deflect the "when it will start taper", the underlying remains that if the conditions do not meet, they will not start tapering.  Couple of good economic data today also helped regional bourses to move up.  China official PMI came in as a surprise to many with a 50.3 reading in July vs 50.1 in June beating expectation of 49.9.  In the afternoon, Europe PMI also came in strongly with a 50.3 last month, up from 48.8 in June and beating estimate of 50.1.

For STI apart from the global events, DBS being the first local bank to release its earning, produced a better than expected set of result, that sentiment spread to the other 2 local bank stocks and the 3 of them alone contributed about 1/4 of STI for the day.  Though most of the data were biased towards the positive side, pointing to global economy is improving, sentiment wise, most still remain cautious and prefer to wait for clearer signal.  For those S-Reits that were sold down yesterday in fear of US Fed tapering rebounded today as the fear was mitigated for the moment.  Market at the moment is at a junction in which one has to choose to whether to analyze based on sentiment or fundamental.

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