Tuesday, February 4, 2014

Market Summary -- 4th Feb 14

FTSE STI closed 2,965.80, down 25.15 points or -0.84% with a total volume of 1.99b and a total value of S$1.27b.  Total number of advance vs decline was 108 vs 328.  Of the 30 component index stocks, 1 closed positive, 4 unchanged and 25 in the red.  The only gainer component stocks was :-

1. HKLand US$  +0.240

The top 5 loser component stocks were :-

1. Jardine C&C  -0.870
2. JMH 400US$  -0.350
3. JSH 500US$  -0.290
4. UOB  -0.280
5. DBS  -0.240

US markets fell at least 2% after a worse than expected set of ISM data.  Asian bourses taking the cue continued the sell down from yesterday.  Nikkei -4.18%, SSE still on CNY holiday and HSI playing catch up down 2.89%.  STI dropped another 0.84% in thin volume and value day.  Only 1 of the 30 index stocks managed to close positive.

An unexpected fall in US January ISM data triggered the sell off in US markets yesterday.  Some might argued that the weak ISM data was due to the cold weather, others are starting to wonder was US Fed tapering on its stimulus being the correct move.  A solid set of economic data that suggested recovery has prompted US Fed to start taper on its stimulus last month and with latest economic data showing slow down question will be is US Fed assessing the economic situation correctly ?  Another set of important data coming out this Friday will be the non-farm payroll.  If continued improving labor market might trigger US Fed to further taper but should the labor condition starting to turn like the recent economic data, then US Fed will be in catch-22 situation with its stimulus program.  Another event investors will be looking at is the end of the month deadline for US debt ceiling.  Should no action is to be carried out by lawmakers to raise the debt ceiling before the deadline, US Government will have to default on its debt obligation. 

For STI it is another tracking regional bourses performance day though the volume was thin as investors, short-term traders and punters are sidelining.  To be honest, this is not a time to be panic but rather attention should be switched to hawking for bargain hunting opportunity.  While markets like US, Japan, China, Europe, Thailand, India, Indonesia, etc might have some more downside, Singapore STI definitely does not belong to those category.

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