Pre-Market Open Commentary for 09 February 2010
DJIA: 9908.9 -103.84
Nasdaq Composite: 2126.05 -15.07
The US market slipped further, led by Dow, on concerns about the tepid US economic recovery and European debts. Fears that potential debt defaults by Greece might trigger defaults in other European nations including Portugal, Ireland, Italy and Spain continued to weigh on market sentiment. Talks by the finance ministers of the Group of Seven leading economies over the weekend, pledging to continue providing liquidity to sustain economic recovery did little to sooth market concerns.
The Dow Jones Industrial Average lost 1.04% to end below the 10,000 level for the first time in three months while Nasdaq composite fell 0.7%. S&P 500 ended just below breakeven, slipping 0.01 points to close at 1066.18.
On Tuesday, a few major corporations, including Coca-Cola and Walt Disney, are due to report results. The market is also expecting reading on wholesales business inventories for December on the same day.
US light crude oil for March delivery added US$0.70 to settle at US$71.89 a barrel.
In Singapore today:
Debt woes in Greece and potential contagion effect of the rising default risks in other European nations resurfaced to spook markets. The regional markets headed south with Nikkei ending 1.05% lower, Hang Seng falling 0.58% and the Shanghai market giving up 0.14%. The STI bucked the trend, ending 10.06 points higher to 2693.62, led largely by banks. For every stock that rose, 1.71 fell. Trading was listless with turnover of 1.66bil shares with a value of $1.38bil traded as investors stayed on the sideline ahead of the coming Chinese New Year holidays.
Genting Singapore shares started trade at 1030 yesterday 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 cents, below its 42 cents offering. It ended at 41 cents on 47mil shares, probably due to the actions of the stabilization manager.
Expect market to consolidate today in light of the lingering debt crisis in Eurozone and weak overnight close in Wall Street. Economic concerns remain at the forefront of investors’ minds and will continue to dampen sentiment. Trading activity is likely to taper off as the Chinese New Year holidays draw closer.
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Mid Day February 9. Investors not in the mood to take on risk.
US stocks surrendered early gains and slipped in the last hour of trade with the Dow Jones Industrials closing below the 10,000 mark for the first time since November 2009. Renewed fears about the sovereign debts of Greece, Portugal and Spain came to the fore even as assurance from the European finance ministers emerged. `I think the fear contagion is spreading fast and investors aren't in the mood to take on risk' a dealer said. Stocks in Asia opened low but were mostly higher on short covering trades. Nimble traders were using any advances to trim positions while most other investors remained sidelined. The STI index bounced off its 2675 low to close the mid day at 2703.25 points, for a loss of 9.63 points. For every stock that rose, 2 fell. Turnover was 690mil shares with a value of $601mil traded.
Singtel reported results that was slightly ahead of consensus on the back of a growth in mobile subscribers. The stock rose 6 cents at $3.01. Other stocks that rose were UOB, China Dairy, LongCheer, SGX, WIlmar and CapitaLand that added between 1 and 20 cents.
Tales of margin call and forced selling weighed on the broader market. Opportunistic traders would resort to intra-day shorting as a form of instant gratification, dealers said. Shares of Straits Asia, Noble Group, IndoAgric, Swiber, Ezra, Ezion, Jardine C&C, DBS, SIA, F&N, NOL and Olam were down between 2 and 64 cents.
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Market close Feb 9. STI ends on a firm note despite shaky morning start
The US dollar weak ened from mid morning amid rumours that the European finance ministers may have a solution to tackle the fears about the debt defaults of Greece, Portugal and Spain. The firmer US dollars spurred short covering in Asian markets. Taiwan's Taiex jumped 2 percent, its best one day move in 5 months. The STI index gained 51.4 points at 2,745.02 points, a decent move from its 2675 points nadir. Market breadth improved over the day, with about 1.5 gains for every stock that fell. Turnover was 1.36bil shares with a value of $1.33bil traded. Singtel reported results that were slightly ahead of consensus on the back of a growth in mobile subscribers. The stock rose 8 cents at $3.03.
Resource stocks benefitted from the weaker US dollars and probably rose on short covering. Shares of Wilmar, IndoAgric, Straits Asia, Noble Group, Olam and First Resources rose between 2 and 18 cents.
Other stocks that rose were UOB, SIA, UOL, SGX, Hong Kong Land, Keppel Corp, MCL Land and Goodpack that rose between 3 and 54 cents.
On the balance, shares of Jardine C&C, Singapore Land, Venture Corp, F&N, SIA Engineering and NOL fell between 1.5 and 14 cents.
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