FTSE STI closed 3,045.67, down 3.25 points or -0.11% with a total volume of 1.34b and a total value of S$1.03b. Total number of advance vs decline was 157 vs 197. Of the 30 component index stocks, 11 closed positive, 1 unchanged and 18 closed negative. The top 5 gainer component stocks were :-
1. JMH 400US$ +0.600
2. Jardine C&C +0.170
3. UOB +0.050
4. SembCorp +0.050
5. ST Engg +0.040
The top 5 loser component stocks were :-
1. KepCorp -0.150
2. SIA -0.120
3. CityDev -0.060
4. Olam -0.040
5. F&N -0.030
5. Capitaland -0.030
US markets fell at least 1.5% last Friday due to worse than expected corporate earnings from tech stocks spreading to consumer companies like GE and MacDonald. Asian bourses taking the cue opened in the negative for the day but managed to close mixed due to bargain hunting. Nikkei +0.09% despite a worse than expected export data, SSE +0.21% and HSI +0.68%. STI closed flat with a -0.11% crawling back some losses from earlier of the day. 11 of the 30 index stocks managed to register positive closing. Volume for the day was relatively thin though.
US has US fundamental issue in which US stock markets reacted to it. Question should be asked with the US fundamental issue unresolved and a potential fiscal cliff that could bring US economy to recession why US stocks markets were able to rise for past months. Valuation running ahead of its fundamental ? The more than 1.5% drop was nothing more than a reality call to investors to be realistic about US economy.
Over the weekend EU Summit didn't produce any outstanding outcome but EU leaders have committed to produce more detail of the banking union by year end. With recent ECB action to unlimited bond buying, this has more or less buy some time for EU leaders to tackle debt issue. The next EU Summit in December should see detail of banking union and perhaps touching on issue of austerity and boosting growth.
Investors might have panic over the more than 1.5% drop in US stock markets last Friday and hitting the sell button today. However, do note that, US has its own domestic problem and US stock markets being overrun its fundamental basically reacted to it. STI might have limited upside for the time being but that doesn't warrant a sharp drop either. Singapore economy though possible facing technical recession is still better fundamental than US. Investors should focus on corporate earning ( which so far some have produced resilience result ) rather than following what other markets perform. That is never never a wise move.
