Friday, September 20, 2013

Market Summary -- 20th Sep 13

FTSE STI closed 3,237.53, down 14.25 points or -0.44% with a total volume of 5.33b and a total value of S$1.51b.  Total number of advance vs decline was 176 vs 307.  Of the 30 component index stocks, 7 closed positive, 3 unchanged and 20 in the red.  The top 5 gainer component stocks were :-

1. UOB  +0.320
2. DBS  +0.090
3. Semb Corp  +0.050
4. Kep Corp  +0.040
5. GLP  +0.020
5. SGX  +0.020

The top 5 loser component stocks were :-

1. JMH 400US$  -2.440
2. JSH 500US$  -0.410
3. Jardine C&C  -0.300
4. Capitaland  -0.080
5. Wilmar  -0.070
5. SIA Engg  -0.070

US markets closed mixed with mostly in the red after the rally the day before.  Asian bourses also pulled back after yesterday rally.  Nikkei -0.16% and both SSE and HSI were closed for holiday.  STI dropped 0.44% in moderate volume but thin value day.  Only 7 of the 30 index stocks registered positive closing.

Global markets should be now in the post optimism stage after US Fed delayed the tapering.  The delay decision unfortunately brought more questions than answers and should not be view as a good news from macroscopic view.  Any rally in stock markets due to that will not be able to sustain as it is fundamentally unjustified.  Couple of events coming up starting this weekend Germany election in which should a loss to current leader Angela Merkel might cause panic in Euro zone.  The next big event will be how US lawmakers going to resolve the debt ceiling issue.  This debt ceiling is not something by pure US Fed printing money all the way will be able to resolve as it needs fiscal policy.  Next month will also be the start of another quarter earning season and that should be interesting to watch.

STI as expected was on profit taking mode after yesterday rally.  The cheer to no tapering brought nothing but short-lived rally to the market only.  Investors should know by now that stock prices cannot be sustained due to that as it is not fundamentally justified.  The big question of when US Fed will start taper will again on investors' mind and that could once again cause volatility should it become clear of the detail next.  Any attempt to bargain hunt should be based on fundamental and no other means to minimize the risk.

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