Wednesday, October 9, 2013

Market Summary -- 9th Oct 13

FTSE STI closed 3,154.84, up 8.34 points or +0.27% with a total volume of 3.51b and a total value of S$968M.  Total number of advance vs decline was 196 vs 224.  Of the 30 component index stocks, 14 closed positive, 7 unchanged and 9 in the red.  The top 5 gainer component stocks were :-

1. JMH 400US$  +0.530
2. CityDev  +0.180
3. JSH 500US$  +0.110
4. UOB  +0.100
5. Kep Corp  +0.060

The top 5 loser component stocks were :-

1. Jardine C&C  -0.490
2. SPH  -0.040
3. SIA  -0.040
4. SIA Engg  -0.020
5. Semb Corp  -0.020

US markets fell at least 1% yesterday after another day of no solution from US lawmakers.  Asian bourses however managed to end the day mostly higher.  Nikkei +1.03%, SSE +0.62% and HSI -0.62%.  STI tracking most of regional bourses closed +0.27% in another day of thin volume and value day.  14 of the 30 index stocks posted gain.

Another day US Government faced partial shutdown and nothing came out of it from lawmakers to resolve the shutdown and debt ceiling issue.  Global leaders were also seen pressurizing US to quickly resolve the debt ceiling issue.  Should US default, this will not be a trivial thing as almost every countries are holding US Government bond apart from funds, banks and institutions.  The impact to the worst case might even send global economy back to recession.  While the US political parties are trying to see who will blink first to compromise, they are also risking being labeled as the one who create another global financial crisis should US default.  News that US Senate dominated by Democrates have proposed a short-term solution and would test vote on it.  Another piece of news that brought some relief to Asian bourses today was President Obama will be nominating Janet Yellen as the next Fed Chairman.  The current Vice-Chairman is renowned for its pro stimulus policy pretty much in the same wavelength as current Chairman Ben Bernanke and that  assured investors that the current US Fed stance on monetary policy will remain as status quo.

STI started off in the red but recovered to close positive after the Janet Yellen's new.  However, volume and value were thin indicating still lot of sideline as investors holding out to see how US going to resolve the shutdown and debt ceiling issue.  While there is a possibility that US might default but majority believe the debt ceiling will be resolved before the deadline.  Most of the stock prices are currently trading near the support level and should good news emerge, they will bounce off from current support as bargain hunters and funds will be coming in.  However, if US default, a breakdown in stock market is possible.  Hence, bargain hunt must come with good risk management to minimize risk at the moment.

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