Wednesday, July 16, 2014

Market Summary -- 16th Jul 14

FTSE STI closed 3,304.43, up 13.01 points or +0.40% with a total volume of 1.69b and a total value of S$851M.  Total number of advance vs decline was 220 vs 189.  Of the 30 component index stocks, 19 closed positive, 4 unchanged and 7 in the red.  The top 5 gainer component stocks were :-

1. JMH 400USD  +0.400
2. UOB  +0.180
3. Jardine C&C  +0.080
4. GLP  +0.040
5. HongkongLand USD  +0.040
5. SIA Engg  +0.040

The top 5 loser component stocks were :-

1. SIA  -0.030
2. CityDev  -0.030
3. StarHub  -0.020
4. Wilmar  -0.010
5. Olam  -0.010
5. Ascendas Reit  -0.010

US markets closed mixed yesterday and Asian bourses were also mixed for the day.  Nikkei -0.10%, SSE -0.15% and HSI +0.27%.  STI rose 0.40% with thin volume and value and 19 of the 30 index stocks posted gain.

Mixed corporate earning and Fed Chairman's testimony caused US markets to be mixed.  From the testimony, it commented that though US economy is recovering but still in need of the stimulus support but the most bearish comment came from when US Fed was concerned about the bubble formed in leveraged loan.  While the assessment that US economy is recovering is encouraging but the concern of bubble formed from leveraged loan will begin to raise questions in the mid term.  Any action to pop that bubble will probably see equity markets heading for a correction.  China released its 2Q GDP figure this morning coming in at +7.5% slightly above the consensus of +7.4%.  However, that failed to encourage Asian markets as most of the regional bourses fell to the negative.  The positive figure was due to the mini stimulus in which Chinese Government unveiled on infrastructure spending but question will be asked whether the underlying consumer spending (to boost economic growth) is it really contributing to that figure.

STI on a thin volume basis closed +0.40% managed to move about 3,300 level mainly due to the blue chips as they firmed up prior to their respective earning release.  On a broader market, it was again range bound with mid and small caps showing sign of selling off, probably due to rotation out to the blue chips for earning play.  Short-term wise due to earning play, STI should be biased towards the upside but watch out for the underlying fundamental to justify where the upside should be.

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