Friday, June 20, 2014

Market Summary -- 20th Jun 14

FTSE STI closed 3,258.80, down 10.22 points or -0.31% with a total volume of 1.98b and a total value of S$1.16b.  Total number of advance vs decline was 184 vs 244.  Of the 30 component index stocks, 6 closed positive, 6 unchanged and 18 in the red.  The top 5 gainer component stocks were :-

1. JSH 500USD  +0.080
2. SembCorp  +0.070
3. CityDev  +0.040
4. KepCorp  +0.020
5. GLP  +0.010
5. Wilmar  +0.010

The top 5 loser component stocks were :-

1. DBS  -0.170
2. Jardine C&C  -0.100
3. OCBC  -0.070
4. HongkongLand USD  -0.070
5. SIA Engg  -0.060

US markets closed mostly higher with S&P500 inched up another record closing.  Asian bourses were mixed with Nikkei -0.08%, SSE +0.15% and HSI +0.11%.  STI fell 0.31% in thin volume and value with only 6 of the 30 index stocks registered gain.

It was post-Fed day resulting in flat and mixed performance for US markets as investors began to digest the FOMC outcome.  Though US Fed gave positive guidance to economy growth and assured of no rate hike till 2015, citing potential interest rate at end of 2015 will be 1.13%, there is still much to talk about.  Rising from 0% to 1.13% in step of 0.25% that would take US Fed about 4 to 5 meetings to do it.  With the pace of US Fed tapering, the QE3 could be totally withdraw before end of this year and the first interest rate hike could be 1Q of 2015.  Questions will be asked what will happen to US economy after the post QE and first interest rate scenario.  Those are at the moment uncertain and with US stock markets keep moving up higher, the odd is when reality kicks in, stock markets will get ugly.  Asian markets were mostly flat given the lack of catalysts and concern on Iraq violence and not to mention the impact of US reality (post QE and first interest rate hike).  Look like Asian markets are more practical than US markets in doing the extremely bullish stance.

STI fell 0.31% and just less than 0.1% away from a pull back of 1.5% from recent high; the half-way point of a potential 3% correction.  Again, the blue chips and big cap stocks were muted while main activity was on the punter stocks.  It might not be the bottom of the correction now but selectively, it is the time to start to slowly accumulate with a 3% to 5% correction in mind.

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