Thursday, March 20, 2014

Market Summary -- 20th Mar 14

FTSE STI closed 3,057.20, down 23.55 points or -0.76% with a total volume of 1.65b and a total value of S$1.15b.  Total number of advance vs decline was 136 vs 265.  Of the 30 component index stocks, 2 closed positive, 2 unchanged and 26 in the red.  The 2 gainer component stocks were :-

1. SIA  +0.080
2. JSH 500US$  +0.020

The top 5 loser component stocks were :-

1. Jardine C&C  -1.430
2. JMH 400US$  -1.200
3. Semb Corp  -0.100
4. Kep Corp  -0.090
5. DBS  -0.090

US markets fell after US Fed FOMC meeting outcome with a drop of average 0.60%.  Asian bourses were in the red for the day with Nikkei -1.65%, SSE -1.40% and HSI -1.79%.  STI in line with regional bourses fared better despite the drop with a -0.76% closing.  Value for the day was moderate but volume was thin and only 2 of the 30 index stocks posted gain.

There was no surprised that US Fed taper another US$10b on its QE3 but what spooked investors was the indication that interest rate could hike sooner than expected.  That has sent nervous and panic to global stock markets.  Asian markets with no events for the day were on profit taking as the sooner than expected rate hike unsettled investors.  Panic, knee-jerk reaction and with fund managers possible readjusting their portfolio in anticipation of that rate hike, the global stock markets suddenly were biased towards the downside.  However, the rate hike is something that eventually will have to come, it is something that restore everything back to the long-run equilibrium line.

STI was on selling mode since the start of trading with any bargain hunting was keeping at the bay.  What investors need to do now is to look at each individual company especially at their debt level as companies with stronger cash flow will be able to withstand the rate hike scenario better.

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