FTSE STI closed 3,338.63, down 4.33 points or -0.13% with a total volume of 1.10b and a total value of S$878M. Total number of advance vs decline was 156 vs 275. Of the 30 component index stocks, 8 closed positive, 4 unchanged and 18 in the red. The top 5 gainer component stocks were :-
1. SembCorp +0.060
2. Olam +0.030
3. ThaiBev +0.025
4. ComfortDelGro +0.010
5. Kep Corp +0.010
5. SPH +0.010
5. ST Engg +0.010
The top 5 loser component stocks were :-
1. JMH 400USD -0.600
2. JSH 500USD -0.350
3. Jardine C&C -0.340
4. DBS -0.110
5. HongkongLand USD -0.050
US markets fell at least 0.5% yesterday and Asian bourses taking the cue were mostly in the red. Nikkei +0.25%, SSE -0.35% and HSI -1.93%. STI fell on open but managed to crawl back the loss and close flat in thin volume and value day. Only 8 of the 30 index stocks posted gain.
The excuse for US markets selling down was concerned of interest rate hike by the US Fed. While one do not expect the low interest rate to stay low forever and a possibility that it will hike in 1Q 2015, that reason should not be valid for US markets sell down. In actual fact, US markets are very overdue for a correction regardless it is due to concern of interest rate or not. For Asia markets, it was very easy to take the interest rate issue as an excuse to sell down but unlike US markets, the sell down will only present bargain opportunity (not so for US markets). Interest rate hike might not be bad news for Asia economy as a whole.
STI following regional bourses was in the red but did slightly better in closing flat. The volume and value were thinner than past days indicating possible that any downside will be limited. In fact, STI still trying to form a support around the 3,340 region. That could only fail if it breaks down at 3,280. Like most of Asian markets, the use of US Fed interest rate hike as an excuse to sell down the market will only present bargain hunting opportunity in STI. The onus is companies with strong cashflow, positive earning and low debt level will be able to withdraw the storm of interest rate hike.
