Thursday, January 30, 2014

Market Summary -- 30th Jan 14

FTSE STI closed 3,027.22, down 20.71 points or -0.68% with a total volume of 1.63b and a total value of S$1.02b.  Total number of advance vs decline was 130 vs 249.  Of the 30 component stocks, 4 closed positive, 3 unchanged and 23 closed in the red.  The 4 gainer component stocks were :-

1. JSH 500US$  +0.060
2. Semb Corp  +0.010
3. GoldenAgr  +0.005
4. Olam  +0.005

The top 5 loser component stocks were :-

1. Jardine C&C  -0.490
2. CityDev  -0.250
3. JMH 400US$  -0.210
4. UOB  -0.190
5. Kep Corp  -0.140

US markets fell at least 1% after US Fed announced another US$10b cut in its QE to US$65b from February.  Asian bourses were all in the red for the last trading day of the Year of Snake with Nikkei -3.04% (still trading at this moment), SSE -0.33% (still trading at this moment) and HSI -0.48%.  STI fell 0.68% in a half-day trade with moderate volume and value.  Only 4 of the index stocks managed to register positive closing.

US Fed's decision to further taper do raise some questions.  If the US Fed assessment that QE's effect is waning and US economy strengthening then the current emerging markets sell off is no doubt nothing but pure speculation.  On the other hand, should the current emerging markets woe affecting US economy (it will have since economy is globally coupled and US cannot grow without emerging markets) and US Fed QE's effect is no longer effective then it will conclude that monetary policy is no longer a tool to fix US economy but rather fiscal policy.  The answer of which shall be revealed in months time.

STI started the day in the red and at one point fell more than 1% but managed to recover some ground near closing as short-seller closing position for the CNY holiday.  No daredevil will want to risk having a position especially short position over the CNY holiday period as anything can happen during these periods.  The short has no doubt the most downside risk than long.

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