08 Feb 10 : Mixed Market

Pre-Market Open Commentary for 08 February 2010

DJIA: 10012.23 +10.05
Nasdaq Composite: 2141.12 +15.69

The US market managed to claw out gains on Friday, led largely by the technology sector and as greenback trimmed gains, following earlier sharp losses as investors were concerned that the growing debt crisis in Europe would derail the US economic recovery. On the economic front, the US jobs reports were mixed with employers cutting 20,000 jobs from their payroll in December, worse-than-expectations of an increase of 15,000 jobs. On a more positive note, unemployment rate fell to 9.7%, ahead of expectations of a steady hold at 10%. There were also some positive leading signs on the jobs situation with increases in both the work week and temporary agency employment.

For the week, all the major indices ended lower. The Dow Jones Industrial Average declined 0.55% and S&P 500 fell 0.72% to end at 1066.19. Nasdaq composite lost 029%.

Expect worries over the rising debt issues in Europe to continue to affect market sentiment however, the market will also take cues from earnings and economic reports. The week ahead brings the quarterly results from consumer companies including Coca-Cola and Walt Disney on Tuesday and Sprint Nextel on Wednesday. Economic reports on retail sales, inventories, employment and consumer sentiment can also be expected but there are no market-moving economic reports scheduled on Monday.

For the week, US light crude oil for March delivery fell US$1.70, or 2.33%, to settle at US$71.19 a barrel.



In Singapore today:

Most Asian markets slumped on Friday following Wall Street tumble with its key indices falling between 2.5% and 3.1% last Thursday on worries about the US job market and growing concerns about European debt. The STI did not escape the bloodshed falling 61.42 points or 2.24% to close at 2683.56. For the week, the STI was 61.79 points, or 2.2%, lower.

Expect market today to take cues from the positive close on Wall Street last Friday. For the week ahead, we expect the lingering debt concerns in the Eurozone and its impact on global economic recovery to prevail. Also, market will take cues from the corporate performances of blue chips reporting results this week including SingTel, ComfortDelgro, CapitaLand and Neptune Orient Lines.

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Mid Day February 8. Investors largely sidelined ahead of Chinese New Year.

Whether this is a correction of the huge move from the March 2009 lows or the start of a new bear trend, no one knows. For sure, speculators are now licking their wounds given that some second liners have fallen over 40 per cent in the last fortnight. Stock commentators are quick to narrate the downtrend, with a `sell the bounce bias' which would effectively mean would be investors remain burrowed in the ground. The STI index bounced 8.94 points at 2692.50 points. Market breadth was flat (some downward bias) at best with investors largely sidelined ahead of the coming Chinese New Year Holidays. Turnover was 803mil shares with a value of $594mil traded.

Genting Singapore shares started trade at 1030 as the company used the delay in opening trade to announce that it had been awarded the casino license. The stock opened at $1.16 before retreating to end 1 cent up at $1.12 no 129mil shares. Dealers attributed this to `buy rumour, sell news'.

New listing China Hu An Cable disappointed as it made its debut at 40.5 cents, below its 42 cents offering. It ended at 42 cents on 33mil shares, probably due to the actions of the stabilization manager. Heading lower today were shares of Great Eastern, Hyflux, Jardine C&C, Noble Group, SPB, Bukit Sembawang, Jardine Strategic, SATs Services and UIC that shed between 1.5 and 26 cents. On the balance, shares of DBS, UOB, OCBC Bank, Venture Corp, ST Engineering and Keppel Corp rose between 3 and 16 cents.

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Market close Feb 8. Range trading in the absence of a clearer market outlook

Stocks in Sing apore traded within a limited range today between positive and negative territory, as investors were undecided on the outlook going forward and chose to take profit instead or cut losses, whatever the position may be. The positive trading of the US index futures in the afternoon helped the STI index to close 10.06 points higher at 2693.62 points. Market breadth was flat (some downward bias) at best with investors largely sidelined ahead of the coming Chinese New Year Holidays ˆ the Singapore market will be closed next Monday and Tuesday. Turnover was 1.66bil shares with a value of $1.38bil traded.

Genting Singapore shares started trade at 1030 as the company used the delay in opening trade to announce that it had been awarded the casino license. The stock opened at $1.16 before retreating to end 2 cents lower at $1.09 on 255mil shares. Dealers attributed this to `buy rumour, sell news'.

New listing China Hu An Cable disappointed as it made its debut at 40.5 cen t s, below its 42 cents offering. It ended at 41 cents on 47mil shares, probably due to the actions of the stabilization manager.

Heading lower today were shares of Jardine C&C, Great Eastern, JSH, STX Panocean, Cerebos, Sp Land and Wilmar, that shed between 9 and 64 cents.

On the balance, shares of DBS, UOB, SIA, Venture and APB, rose between 8 and 26 cents.