FTSE STI closed 3,011.70, up 22.44 points or +0.75% with a total volume of 1.47b and a total value of S$1.48b. Total number of advance vs decline was 291 vs 117. Of the 30 component index stocks, 24 closed positive and 6 in the red. The top 5 gainer component stocks were :-
1. Jardine C&C +1.020
2. OCBC +0.180
3. CityDev +0.170
4. DBS +0.170
5. KepCorp +0.160
5. SembCorp +0.160
The top 5 loser component stocks were :-
1. JMH 400US$ -0.640
2. JSH 500US$ -0.190
3. SingTel -0.030
4. GoldenAgr -0.030
5. SIA Engg -0.010
5. GLP -0.010
US markets rallied average almost 2% yesterday night with positive news from Europe and better than expect ADP job data. Asian bourses taking the cue also on a rally run for the day. Nikkei closed +2.20%, SSE +3.70% and HSI +3.09%. STI however underperformed regional bourses with only +0.75% in moderate volume. 24 of the 30 index stocks posted positive closing.
It was a relief rally. As expected ECB produced the "sterilized unlimited bond buying" program to target Government bond of 1 to 3 years despite keeping interest rate unchanged at 0.75%. This measures yet to be really finalized as have to await Germany court's ruling of the approval of ESM on 12th September 2012 is a credit crunch prevention for EU nation targeting especially to Spain and Italy. Before getting over excited investors have to really note that this is credit crunch solution and not fiscal measures to counter fiscal issue and also should German court fails to approve the ESM then this program might hit roadblock. Well ECB bold move could be a pressure to German court to rule in favor of the ESM after all. Investors need to watch out for next month 18th - 19th EU Summit for detail of fiscal measures and policies to tackle the austerity vs growth issue and that is the core solution to the EU debt crisis.
US ADP job data came in better than expected ahead of tonight non-farm payroll and there is expectation that tonight data could be good. Now, here comes the interesting thing, should the data be good, US Fed should not get into QE soonest and for investors who yearn for QE then this will not be a good news after all. China also came out good news in which the Chinese Government approved plans to spend on infrastructure to revive the sluggish economic growth, pretty much close to stimulus program and as expected specifically targeted towards consumer and services based sector.
With all the good news, global markets were on a rally run but whether can it sustain still a question. At the moment shall consider as relief rally and there are more dark clouds in the next few months in particular the US fiscal cliff issue. Do still keep option open of October to December market could undergo a correction in which bottom out in December.
