Defensive stocks have been under selling pressure for past days. Possible case could be funds selling out, taking money out of Asian markets. Should these defensive stocks, in particular the S-Reits are able to hold on to their respective support levels, market should have limited downside as of now.
There is another scenario which is possible also. Given the recent events especially after the G20 meeting over the weekend with IMF and ECB pledging to increase their respective war chest to tackle the debt crisis, funds could be flowing out of Asia and back to US and Europe given that their respective share prices in particular those of Europe has been badly sold down. With the aids and commitment from both IMF and ECB, this should stabilize the crisis situation and from the perspective of stock valuation, those stocks are nevertheless very much cheaper than those of Asian. Should such situation happens, US and European stocks could be moving in total direction from Asian. That is to say, US and European markets could be moving up and yet Asian markets will not be following that as the selling pressure by funds capping any upside.
