1. UOB +0.060
2. JSH 500US$ +0.040
3. StarHub +0.020
4. GoldenAgr +0.005
The top 5 loser component stocks were :-
1. JMH 400US$ -1.090
2. Jardine C&C -0.490
3. DBS -0.220
4. CityDev -0.180
5. SembCorp -0.160
5. OCBC -0.160
US markets fell at least 1.6% yesterday night as ECB President's conference dented sentiment over a better than expected jobless claims. ECB reduced interest rate by 25 basis point to 1% and extend bank loan to 3 years from the current 1 plus lower required of bank collateral to provide excess liquidity and stimulate bank lending but sentiment soon turned sour when ECB President commented that ECB will not engage in bond buying or cap bond yield to help stem the crisis as those are not ECB primarily role. This has turned bearish for investors as that was what majority want. EU Summit also got to a start yesterday among EU leaders and should have outcome of that tonight.
Asian bourses were in red for the day with Nikkei closed -1.48%, SSE -0.62% after reporting inflation for November fell to 4.2% better than expected and that will leave lot of rooms for China Government to ease monetary policy to spur growth. HSI -2.73%. STI fell 1.24% in very thin volume day of less than 1 billion and again weighed down by property stocks. Furthermore, investors also stay cautious ahead of tonight EU Summit outcome. In general markets fell mainly because investors were over optimistic for tonight EU Summit.
Series of positive and negative news flew from yesterday till now on the EU Summit. Positive news were those of technical detail of EFSF leverage, fiscal unions with treaty changes, ECB yesterday action and EU leaders also drop demand for investors write-offs in bailout. The negative news will be no bigger role for ECB and appears to have met resistance from Finland, Ireland and Netherlands regarding Germany/France's proposal of treaty changes.
What investors should not at present is over optimistic that EU crisis will get solve through this meeting. On the other hand, investors should not be over pessimistic either on the crisis of EU. EU leaders will iron out steps to solve the crisis and eventually that will get it done just a matter of time. What most investors want are quick fix solution like printing money and ECB unlimited purchase of bonds, those solutions no doubt will help to solve credit crunch in the short term but the side effect of those will appear some years later with the EU debt crisis will be back to square one. What EU leaders doing now is building or amending the foundation of the EU to build a stronger support so that it will not encounter similar crisis in the future. Building foundation needs time especially a strong foundation. Investors with short-term view on the stock markets will not like it as the slow method will not bring cheer to stock markets but for long-term investors, think positive of the solution and look at valuation to buy on weakness.
