Pre-Market Open Commentary for 04 March 2010
DJIA: 10396.76 -9.22
Nasdaq Composite: 2280.68 -0.11
US stocks gave up earlier gains as upbeat economic news was overshadowed by market concerns over the job and manufacturing reports due over Thursday and Friday. The private sector cut 20,000 jobs from their payrolls in February, the smallest cut in two years and in line with expectations, after a revised cut of 60,000 jobs in January. A separate reading by an outplacement firm indicated that there were 42,090 job cuts in February, the smallest number of job cuts since July 2006 when 37,178 cuts were announced, down from 71,482 in January, signaling that the pace of job cuts is slowing as the labour market slowly starts to stabilize. The ISM’s service sector index also came in ahead of expectations, rising to 53 in February, against expectations of a rise to 51, from 50.5 in January.
The market also reacted mildly to the Fed’s “Beige Book” reading on the economy which indicated that the economic activity has picked up in nine of the Fed’s 12 districts and consumer spending has also improved modestly.
Greece also announced a US$6.5 bil plan on Wednesday to help reduce its ballooning deficit, but this failed to boost market sentiment. The plan includes US$3.3 bil in new revenue such as taxes and another US$3.3 bil in spending cuts, including pension freezes and cuts in civil servants’ salaries.
The major indices ended mixed with the Dow Jones Industrial Average losing a marginal 0.09% while S&P 500 inched up 0.04% to 1,118.79. Nasdaq composite was virtually unchanged, closing 11 points lower.
Thursday will bring the economic readings of January factory orders and January pending home sales index. The nation’s retailers will also be releasing February sales on the same day.
US light crude oil for April delivery rose US$1.19 to settle at US$80.87 a barrel.
In Singapore today:
An early rally on Wall Street failed to gain traction after a Federal Reserve governer said that interest rates should go up sooner rather than later. Even strong growth from Australia and optimism that the Greek debt crisis might be contained failed to lift market sentiment. Investors remained sidelined awaiting for the US job data for February due on Friday. After trading within a narrow range throughout Wednesday, the STI managed to gain 10.59 points to close at 2782.79. For every stock that gained, 1.6 fell. Turnover was thin with1.29bil shares with a value of $1.14bil traded.
Shares of Sarin closed down a cent at 46.5 cents on recent rumours that the company may be privatised. It had earlier touched a high of 50 cents in morning trades. Sing Holding rose 1.5 cent at 41.5 cents as traders bided up the stock ahead of its property launch next week.
Expect market to be range-bound again today taking cues from the directionless overnight close on Wall Street. In the absence of fresh leads during Asian trading, investors are likely to remain side-lined, awaiting the economic readings from the US market today.
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Mid Day March 4. STI lost early lead to end lower.
Wall Street appeared to be facing big headwinds as each climb upwards has proven harder despite good news. `Good news don't seem to buoy the market. There's too much resistance' a dealer noted. Asian markets were generally lethargic and off the best of the session on Wall Street's negative lead. The STI index lost its early lead to end 7.44 points down at 2775.35 points. For every stock that rose, 2 fell. Turnover was 592mil shares with a value of $574mil traded.
Shares of Midas erupted and jumped to a high of $1.08 on confirmation that it plans to seek a dual listing in Hong Kong. The company will offer up to 340mil shares in a global offering for the purpose of a secondary listing in Hong Kong. A dealer warned investors not to get carried away as the pricing for the offering has not been announced. `I won't be surprised that we are now trading at a premium to the proposed offering price' he mused.
The stock settled 3 cents up at $1.04 on 22.5mil shares. Epure added 1 cent at 87 cents helped by a buy report from a local broker with a target of $1.10. Shares of HL Asia raced to new 2010 higher; adding 15 cents at $3.85 after a foreign broker upped the stock to a buy with a target of $4.90. F&N rose 6 cents at $4.36 with the help of a buy report with a $5.35 target.
On the balance, shares of Jardine C&C, DBS, Wilmar, Hylfux, UOL, Frasers CT, Sarin, SATS Services, M1, UIC and OCBC Bank eased between 1.5 and 18 cents.
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Market close March 4. STI again lower despite positive start
Asian markets were generally le thargic and off the best of the session on Wall Street's negative lead. The STI index lost its early gains to end 14.09 points down at 2768.70 points. For every stock that rose, 1.5 fell. Turnover was 1.2bil shares with a value of $1.18mil traded.
Shares of Midas erupted and jumped to a high of $1.08 on confirmation that it plans to seek a dual listing in Hong Kong. The company will offer up to 340mil shares in a global offering for the purpose of a secondary listing in Hong Kong. A dealer warned investors not to get carried away as the pricing for the offering has not been announced. `I won't be surprised that we are now trading at a premium to the proposed offering price' he mused. The stock settled 3 cents up at $1.04 on 28mil shares.
Epure added 0.5 cents at 86.5 cents helped by a buy report from a local broker with a target of $1.10. Shares of HL Asia raced to new 2010 higher; adding 15 cents at $3.85 after a foreign broker upped the stock to a buy with a target of $4.90, although the stock eventually closed at $3.80, a gain of 10 cents.
On the balance, shares of Wilmar, SGX, DBS, Hylfux and Venture eased between 8 and 18 cents.
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