Friday, August 8, 2014

Market Summary -- 8th Aug 14

FTSE STI closed 3,288.89, down 25.96 points or -0.78% with a total volume 1.51b and a total value of S$1.08b.  Total number of advance vs decline was 116 vs 364.  Of the 30 component index stocks, 3 closed positive, 3 unchanged and 24 closed in the red.  The 3 gainer component stocks were :-

1. UOB  +0.050
2. ComfortDelGro  +0.030
3. TahiBev  +0.005

The top 5 loser component stocks were :-

1. Jardine C&C  -0.540
2. DBS  -0.330
3. JSH 500USD  -0.200
4. JMH 400USD  -0.190
5. CityDev  -0.110

US markets fell average 0.5% yesterday and Asian bourses were mostly in the red for the day.  Nikkei -2.98%, SSE +0.31% and HSI -0.23%.  STI fell 0.78% in thin volume and value with only 3 of the index stocks managed to register positive closing.

While the tension on Russia-Ukraine still not resolve given that Russia retaliated by sanction import from US, Europe and other nations and to make matter worse deny the airspace for European and US flights to Asia.  Another geopolitical issue surfaced when US President authorized targeted airstrikes in Iraq.  All these geopolitical issues just rubbed away all those positive optimism and caused global markets to another sell down.  It has to be noted that those geopolitical issues were not something just popped up and they have been there for months just that investors were just plainly getting too hype up with the optimism in global economy (allowing US markets to make record high one after another) and now they realized the seriousness of it. 

STI continued the correction and is very near the 3% pull back mark.  While those geopolitical issues have been largely negative at the moment, most forgotten that Asia is relatively safer now.  STI should be heading for the first consolidation region after recent sell down.  However, that doesn't mean it is the bottom of the pull back, a short-term rebound will be coming soon.  Whether current region is able to provide good support will have to depend on how serious those geopolitical issues will be blowing out next week.

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