Pre-Market Open Commentary for 01 February 2010
DJIA: 10067.33 -53.13
Nasdaq Composite: 2147.35 -31.65
Despite upbeat economic readings, Wall Street ended weaker last Friday led by ongoing concerns over PRC’s bank lending curbs, White House’s plan to restrict trading by big banks as well as rating agency warnings about Japanese and British debts. GDP in US grew better-than-expected at a 5.7% annual rate for 4Q09, against forecast of a 4.7% annual rate, after growing at a 2.2% annual rate in the previous quarter. Consumer sentiment index also rose above expectations to 74.4, against expectations of 73, from 72.8 previously while the Purchasing Manufacturing Index rose to 61.5, ahead of expectations of a fall to 57.2, from 58.7 previously.
For the week, all the major indices ended lower. The Dow Jones Industrial Average declined by 1.04% and S&P 500 fell 1.64% to end at 1073.87. Nasdaq composite lost 2.63%.
Expect global economic concerns affecting markets last week to pre-occupy investors this week too. Corporate results of companies due this week include Exxon Mobil on Monday, Time Warner, Pfizer and Cisco Systems on Wednesday and Toyota on Thursday. The coming week is a busy one for economic news and on Monday, readings of personal income and spending, construction spending and ISM manufacturing index for January are due.
For the week, US light crude oil for February delivery fell US$1.65, or 2.21%, to settle at US$72.89 a barrel.
In Singapore today:
Following a one-day rebound on Thursday, the Singapore market resumed its decline on the last trading day in January, with the STI sliding 12.33 points, or 0.45% to 2745.35, led by blue chips. Ongoing concerns weighing down sentiment include China’s tightening of monetary policy, US’ plans to curb the size and speculative activities of banks and worries over the ability of Greece to service debts. For the week, the STI shed 74.36 points, or 2.64%.
The earnings season of Singapore-listed firms is set to continue this week but earnings optimism and analyst upgrades are unlikely to underpin the local bourse. Market sentiment is likely to be weighed down as market is likely to remain pre-occupied with ongoing global economic issues in the PRC and US as well as debt problems in the euro-zone countries including Greece, Spain and Portugal.
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Mid day February 1. Start to the downside for Asia
It was a start to the downside for As ia given Wall Street sold off despite reporting better than expected economic data. The US dollars rose to its best levels since August and that to some was bad for stocks and commodities. With risk adverisity on the rise, dealers believe trading volumes may slow down as we head into the Chinese New Year holidays. A fund manager saw this as a healthy correction and current noise; such as the (military) spat between China and USA, as an excuse for the pullback. The STI index slipped 8.3 points at 2737.04 points but was off its nadir of 2724.04 points. For every stock that rose, 2 fell. Turnover was 704mil shares with a value of $587mil traded.
CWT revealed plans for the sale and leaseback of its commodity hub and it shares rose to a high of 97 cents before declining to end unchanged at 93.5 cents. The move to unlock value would free up more cash for the company for potential acquisitions, a trader said. Biosensors a reported a strong set of 3QFY2010 results and surprised the market with its strong numbers. A foreign broker increased their earnings expecations and upped the price target to $1.23. The stock closed 3.5 cents up at 83.5 cents. Z-Obee shares rose 2 cents at 38 cents on hopes that the counter would rise further when it receives the approval for its dual listing in Hong Kong. Stocks that rose today were Wilmar, OCBC Bank, TPV, Creative Technology, Hyflux, Goodpack and Semb Corp that rose between 2 and 12 cents.
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Market close Feb 1. Asian starts trading week on a cautious note
Wall Street‚s weak close l ast Friday led to further caution in Asian markets this week. Investors were not keen to take fresh positions ahead of the Chinese New Year holidays coming next week and the perceived continued uncertainty over possible moves by the Chinese government to curb inflation in the country. The STI index slipped 9.18 points at 2736.17 points but was off its nadir of 2724.04 points. For every stock that rose, 2 fell. Turnover was 1.34bil shares with a value of $1.24bil traded.
CWT revealed plans for the sale and leaseback of its commodity hub and it shares rose to a high of 97 cents before declining to end down 0.5 cents to 93 cents on 7.7m shares traded. The move to unlock value would free up more cash for the company for potential acquisitions, a trader said.
Biosensors a reported a strong set of 3QFY2010 results and surprised the market with its strong numbers. A foreign broker increased their earnings expectations and upped the price target to $1.23. The stock cl o sed 6 cents up at 86 cents with 23.2m shares changing hands.
Z-Obee shares rose 0.005 cents at 36.5 cents on hopes that the counter would rise further when it receives the approval for its dual listing in Hong Kong.
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On the balance, shares of APB, Jardine C&C, F&N, SGX, DBS, Venture Corp, HL Asia, Wing Tai, UOB and CapitaLand eased between 5 and 60 cents.
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