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Pre-Market Open Commentary for 01 March 2010
DJIA: 10325.26 +4.23
Nasdaq Composite: 2238.26 +4.04
US stocks ended little change last Friday as investors remained cautious following a surprise drop in existing home sales for January to 5.05 mil unit rate, worse-than-expectations of a rise to 5.5 mil unit rate, from a revised 5.44 mil unit rate in December while AIG reported a weaker-than-expected US$9 bil quarterly loss.
Other economic reports released were mixed with 4Q09 GDP growth at 5.9% annual rate, compared to the initial reported rate of 5.7%. The Chicago purchasing managers’ index on regional manufacturing rose to 62.6 in February, ahead of expectations of a fall to 59.7, from 61.5 in the previous month. In contrast, consumer sentiment index came in worse-than-expected dipping to 73.6 in February, against expectations of a rise to 73.9, from 73.7 in January.
For the week, all the major indices ended lower. The Dow Jones Industrial Average fell 0.74% and S&P 500 declined 0.42% to end at 1104.49. Nasdaq composite dipped 0.25%.
A stream of economic reports due this week will set the market tone and these include the highly-anticipated jobs report, retail sales, auto sales and factory order. Monday will bring the January personal income and spending reading, inflation report, construction spending and ISM manufacturing index.
In Singapore today:
News of a rise in Singapore manufacturing output in January by 39.4% over last year brought cheers to the market but concerns over the weak US job figure and Greece’s debt crisis dampened sentiment. The STI index closed only marginally higher on Friday, adding 1.71 points to 2750.86. For the week, the STI declined 6.28 points, or 0.22% lower.
In light of disappointing reports on consumer confidence, jobless claims and home sales from US last week, as well as lingering concerns over Greece debt woes and China’s bank lending curbs, we expect market sentiment to be cautious to the start of March. Economic reports released from US in the coming week will shed more light on the state of the US economy.
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Mid Day March 1. Asian bourses mostly higher.
Asian bourses were mostly higher led by mining issues and encouraged by fresh murmurs that a help plan for Greece would soon be announced. The STI index rose 20.39 points at 2771.25 points. For every stock that fell, 1.5 rose. Turnover was 834mil shares with a value of $716mil traded.
Shares of Wilmar rose 15 cents at $6.65 after it turned in a decent profit helped by volume growth across its products segments. The results were above consensus expectations. Shares of Golden Agric, IndoAgric, Noble Group, Olam and Straits Asia rose between 2 and 6 cents following demand for resource stocks in the region. Venture Corp's better than expected results helped boost the counter 17 cents higher at $8.61. A local broker issued a buy report with a target of $9.03. Talks of short covering triggered a bounce in the shares of Genting Singapore that rose 1.5 cents at 91 cents.
China's lastest PMI data came in at 52 points, a dip from the previous month number of 55.8 points. The below consensus number suggested that the pace of manufacturing expansion was slowing down and probably meant the authorities could put off a rate hike soon. Trading interests in S-chips appeared active with shares of Pac-Andes, Yanlord, Cosco Corp, China Fishery Group, Sinotel and Epure International added 1 and 8 cents.
On the balance, shares of STX PanOcean, UOB, Jardine C&C, CNA, Haw Par and PSL eased between 1 and $1.00.
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