FTSE STI closed 3,012.25, down 31.02 points or -1.02% with a total volume of 1.70b and a total value of S$1.25b. Total number of advance vs decline was 110 vs 270. Of the 30 component index stocks, 2 closed positive, 2 unchanged and 26 closed negative. The 2 gainer component stocks were :-
1. Wilmar +0.030
2. SembCorp +0.01
The top 5 loser component stocks were :-
1. JMH 400US4 -1.010
2. JSH 500US$ -0.430
3. Jardine C&C -0.340
4. DBS -0.200
5. CityDev -0.190
US markets fell at least 2.3% yesterday with selling across the board due to fiscal cliff fear. Asian bourses taking the cue were all on selling mode dropping at least 1%. Nikkei -1.51%, SSE -1.63% and HSI -2.41%. STI fell 1.02% in moderate volume and only 2 of the index stocks managed to register positive closing.
The word is FEAR of the fiscal cliff after Obama won the election. Well that has nothing to do with Obama actually, in fact regardless who the new president will be, the outcome still the same, fear of the fiscal cliff can bring US economy back to recession. This fiscal cliff is not something new and has been in the talk for past months just that then investors were kind of ignore it. With the sharp drop on US markets yesterday, it gave a signal that the fiscal cliff is not something to be taken lightly. Whether the fiscal cliff could be avoided all down to the gridlock between the Republicans and the Democrates whether they can compromise and iron out something before January 2013, the auto mechanism of cutting spending across the board. How volatile the market will be leading to that event will eventually depend on the timeline in which the lawmakers making some plan to avoid it. However, do note that, the fear and panic selling due to the fiscal cliff issue will eventually lead to great bargain opportunity. Investors should closely watch out for buying opportunity rather than focusing on dumping. The outcome of the fiscal cliff is not something not known of, they knew it and they will do whatever they could to avoid it, just a matter of time when they settle for it.
China commences on its leadership transition today. This event has not much of a shocker as compared to US. China leadership transition has been planned for long ago and the transition will be a smooth one. The new leadership will lead China into reform for the next decade. The blueprint for the reform has already been ironed out and it is just a question of whether the new leadership can successfully execute it or not.
Investors looking to buy better off not looking at STI to decide when to enter. It is best to look at the stock individually to determine entry level. Be able to stomach the volatility and risk from now till December in which market should hit the bottom again, the third and last for the final leg of the bull market.
