Thursday, October 16, 2014

Market Summary -- 16th Oct 14

FTSE STI closed 3,154.21, down 44.51 points or -1.39% with a total volume of 1.36b and a total value of S$1.34b.  Total number of advance vs decline was 75 vs 420.  Of the 30 component index stocks, 1 closed positive, 3 unchanged and 26 in the red.  The only gainer component stocks was :-

1. CapitaMall  +0.005

The top 5 loser component stocks were :-

1. Jardine C&C  -0.580
2. JMH 400USD  -0.440
3. JSH 500USD  -0.380
4. Kep Corp  -0.370
5. DBS  -0.290

US markets did a roller coaster ride with extreme volatility closing in the red again.  Asian bourses took the cue of the big swing traded in the red for the day.  Nikkei -2.22%, SSE -0.71% and HSI -1.03%.  STI fell 1.39% in higher volume and value than past days with only 1 of the 30 index stocks managed to register positive closing.

US retail sales shrank 0.3% last month, dropping more than expected and with worries of Euro zone economy added nothing but selling pressure to the markets.  It swing to a drop of more than 2% before intra-day rebound to close just a drop of less than 1%.  Extreme volatility, extreme panic, extreme fear and capitulation.  Asian markets took on the fear and panic and most of them dropped at least 1%.  Though SSE managed to swing back to positive but failed to hold on the gain and eventually closed in the red too.  Before the correction, everyone welcome the correction but when the crash came, suddenly, they shifted the goal post again and instead of welcoming the healthy correction so that they could buy on dip, they start to fear that could be the start of a bear market.  The reasons they gave were the slowdown in Europe and China but those have been happening for past months just that they preferred to ignore them previously.  Very fickle minded !

STI in line with regional bourses fell 1.39% and heading towards almost 7% drop from recent peak.  There was some fear and panic selling probably from the funds who didn't sell out at the end of 3Q, decided to hold and hope for a better 4Q.  Market just need for these funds to dump finish before it can stage a reasonable and strong rebound.  Do not try to time the bottom, start buying the beaten down blue chips and fundamental strong stocks on dip, be greedy and not fear !!!

"Be Fearful When Others Are Greedy and Greedy When Others Are Fearful" -- Warren Buffett

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