Pre-Market Open Commentary for 12 February 2010
DJIA: 10144.19 +105.81
Nasdaq Composite: 2177.41 +29.54
The US market rallied on Thursday after the European Union reached a deal to provide financial aid to debt-ridden Greece eased concerns of a potential damaging default. The details of the financial aid are not expected to be finalised until next Monday but is likely to involve some form of loans. An upbeat weekly jobless claims report further lifted market sentiment, with the number of new claims for unemployment falling to 440,000 last week, better-than-expectations of a fall to 465,000, from 483,000 the previous week. Continuing claims also came in better-than-expectations, falling to 4,538,000, against expectations of 4.6 mil claims, from 4,617,000 in the previous week. A note of caution is that there could potentially be as many as 150,000 jobs lost in February following back-to-back blizzards in the Northeast region which could keep people home from work or stall hiring.
All the major indices rose with the Dow Jones Industrial Average gaining 1.05% while S&P 500 rose 0.97% to 1,078.47. Nasdaq composite climbed 1.38% higher.
Friday will bring consumer sentiment index reading for February, which is expected to rise to 74.8, from 74.4 in January.
US light crude oil for March delivery rose US$0.76 to settle at US$75.28 a barrel.
In Singapore today:
Mirroring most of the regional markets, the Singapore market advanced when the firmer Euro versus US dollar yesterday signaled that some form of financial aid to debt-troubled Greece could be imminently announced. A lower-than-expected inflation data from China, with consumer prices rising a YoY 1.5% in January compared to a sharp YoY increase of 1.9% in December, also eased concerns over monetary tightening measures in China. The Shanghai bourse added 0.1% while Hang Seng rose 1.85%. The STI index rose 19.24 points, or 0.7%, to close at 2753.63. For every stock that fell, 2.3 rose. Trading activity was thin with turnover of 1.20bil shares with a value of $1.08bil traded.
Resource stocks did well with the lower US dollar. Shares of IndoAgri, Straits Asia, Noble Group, Olam, Wilmar and Golden Agric rose between 1 and 6 cents. Other issues that gained were F&N, SIA, City Developments, SGX, Haw Par, DBS, Great Eastern Holdings, M1, Cosco Corp and Keppel Corp that rose between 2 and 42 cents.
Expect market to be range-bound and trading activity to be light today as investors are likely to shun taking on fresh positions ahead of the Chinese New Year holidays.
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Mid Day February 12. STI in tight range trading.
US stocks pushed into a positive close after an anemic start, led by energy and materials stocks. Asian markets were mixed as traders tried to read into European bourses that finished lower despite a pledge from the EU leaders to help Greece. `The Euro dollars retreated and European markets fell. Perhaps the recent bounce had discounted this news' a dealer said. The WSJ (Wall Street Journal) online had a sub-header that read " Euro-zone countries will provide coordinated action if needed to preserve stability".
The STI index traded in a tight range and ended 6.62 points up at 2760.25points. Data hawks will be keeping a keen eye on the US retails sales numbers later today. The abbreviated trading week in lieu of the Chinese New Year holidays would mean lesser trading activity as most prefer a clean slate (negligible positions) to start the new year with. `In essence, if we survive the holidays with little downward pressures, we should start next week with a fair amount of pent up buying' a dealer
reckoned.
Olam jumped 13 cents at $2.51 as investors cheered its robust interim results. Other resource stocks like Wilmar, Noble Group and Straits Asia rose between 5 and 10 cents. While a loss had been forecasted, NOL shed 5 cents at $1.66 after it reported its 4Q09 results that fell below expectations.
On the balance, shares of SIA, Kep Corp, RH PetroGas  and SingTel, shed 4 and 44 cents.
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