Thursday, August 7, 2014

Market Summary -- 7th Aug 14

FTSE STI closed 3,314.22, down 6.01 points or -0.18% with a total volume of 1.91b and a total value of S$1.15b.  Total number of advance vs decline was 180 vs 262.  Of the 30 component index stocks, 12 closed positive, 2 unchanged and 16 in the red.  The top 5 gainer component stocks were :-

1. CityDev  +0.090
2. OCBC  +0.070
3. UOB  +0.040
4. GLP  +0.030
5. HongkongLand USD  +0.030

The top 5 loser component stocks were :-

1. Jardine C&C  -0.990
2. JMH 400USD  -0.580
3. JSH 500USD  -0.350
4. DBS  -0.230
5. SembCorp  -0.070

US markets closed flat yesterday and Asian bourses though mixed but mostly in the red.  Nikkei +0.48%, SSE -1.34% and HSI -0.80%.  STI tracking the weakness of regional bourses fell 0.18% in thin volume and value with 12 of the 30 index stocks registered gain.

The tension in Ukraine and EU weakness in economic data (Italy re-entered recession) weighed global markets yesterday with most of them closing in the red.  US markets however, managed to recover from dip and closed flat.  The Russia-Ukraine issue will continue to weigh on global markets for the time being as the impact of those sanctions has spread to the economy of EU and Russia.  While that hurt the economy of EU, Russia and probably even US, Asia should have no or little impact from that and with the global markets using that as excuse to sell down, this will only present bargain opportunity for Asia.

STI in on track for a pull back of 3% from its recent peak and that should be first level of support.  Should that unable to hold, the 5% pull back level will be the next support level.  A pull back of 7% to 10% is possible if the question of US Fed will hike interest rate sooner than expected.  The blue chips might still have room to fall but small and mid caps especially those with great fundamental are getting cheap at current level.

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