Straits Times Index   

STI

Market so quite. So many counters not even making any transaction.
Think many are waiting for HSI to open.

 

STOCKS NEWS ASIA-Markets track Wall Street higher



HONG KONG, Oct 23 (Reuters) - Asian stocks rose on Tuesday, steadying from a two-session slide after upbeat earnings from technology bellwether Apple helped soothe worries about the health of the U.S. economy.

But lingering worries about high oil prices and the full impact of the U.S. housing slump on the world's biggest economy were expected to keep investors cautious.

"It's too early to say whether the market has already seen the bottom," said Lee Woo-hyun, a market analyst at Kyobo Securities in Seoul.

Concerns about the U.S. economy weighed on commodity prices, sending U.S. crude down 29 cents to $85.73, well off a record high of $90.07 a barrel set Friday.

At 0028 GMT, MSCI's measure of Asia Pacific stocks excluding Japan <.MIAPJ0000PUS> had gained 0.6 percent, while Tokyo's Nikkei <.N225> edged up 0.2 percent.

The MSCI index dropped 3.1 percent on Monday, posting its biggest one-day decline in just over two months.

South Korea's KOSPI <.KS11> and Australia's S&P/ASX 200 index <.AXJO> rose 1.1 percent and 0.5 percent respectively.

Investors bought consumer electronics makers such as Sony Corp <6758.T>, Samsung Electronics <005930.KS>, Nintendo <7974.OS> and LG Electronics <066570.KS> sending their shares up 0.6 percent to 3 percent higher.

Some exporters such as Honda Motor <7267.T> also edged higher after falling recently on a rising yen, which tends to hurt the value of overseas sales. The yen's rally against the dollar came to a halt on Tuesday after a rebound on Wall Street.

But mining giant BHP Billiton eased 0.6 percent after it said it was churning out as much copper, iron ore, coal and other mineral commodities as it could to keep up with global demand. [ID:nSYD105884] Also pressured, Sharp <6753.T> fell 1.3 percent a day after the firm said its operating profit in the financial first-half likely slipped 12.4 percent from a year earlier, missing market expectations. [ID:nT39602] On Wall Street, all three major stock gauges ended in positive territory led by the tech-heavy Nasdaq Composite Index <.IXIC>, which settled more than 1 percent higher.

After the bell, Apple beat Wall Street's targets with a 67 percent rise in quarterly profit, sending its shares rising further in after-hours trade.

 

Asia had a weak opening. Whether its sustainable for the day is another question here.
Also not sure whether HSI will rebounce today or still selling down for fear of bubble.
Hence, trade with caution.

^AORD	All Ordinaries	Australia	6,640.500 8:51AM SGT	48.400 (0.73%)	Components, More
^SSEC	Shanghai Composite	China	5,667.332 Oct 22	150.715 (2.59%)	Components, More
^HSI	Hang Seng	Hong Kong	28,373.63 Oct 22	1,091.42 (3.70%)	Components, More
^BSESN	BSE 30	India	17,613.99 Oct 22	0.00 (0.00%)	More
^JKSE	Jakarta Composite	Indonesia	2,453.2109 Oct 22	0 (0.00%)	Components, More
^KLSE	KLSE Composite	Malaysia	1,350.81 Oct 22	19.36 (1.41%)	Components, More
^N225	Nikkei 225	Japan	16,473.57 8:31AM SGT	35.10 (0.21%)	More
^NZ50	NZX 50	New Zealand	4,269.148 8:29AM SGT	47.165 (1.09%)	Components, More
^STI	Straits Times	Singapore	3,642.64 Oct 22	0.00 (0.00%)	Components, More
^KS11	Seoul Composite	South Korea	1,917.79 8:51AM SGT	13.98 (0.73%)	Components, More
^TWII	Taiwan Weighted	Taiwan	9,360.63 Oct 22	0.00 (0.00%)	More

 

Interesting article yipyip, the US are now trying to dissuade the Turks from invading Northern Iraq...hmmm...trying to be a good man now.

 

Maybe its good for the market as it rises too fast. With the backdrop of subprime the market still can hit over 14000 pts...Same goes for our Sti...this blood letting ritual is not over so soon...Or worst...just began...

 

Turkish troops, weapons head toward Iraq
By VOLKAN SARISAKAL, Associated Press Writer

http://news.yahoo.com/s/ap/20071022/ap_on_re_mi_ea/turkey

 

It depend on whether DJ can do a reversal after break.

If yes, the world will be saved.

 

Tommorow round 2 of blood shed?

 

Analysts dismiss spectre of crash, but selling's not over Last week's 4% slide due more to recent sharp run-up than to fear of another crisis   By ANDREW MARKS IN NEW YORK   AS STOCKS plummeted on earnings outlooks and renewed credit worries last Friday on the 20th anniversary of Black Monday, Wall Street forecasters couldn't help but draw parallels to that record-setting dire day of October 19, 1987, when the Dow Jones Industrial Average crashed by more than 500 points, and more impressively, a whopping 23 per cent, in a single day.   'It's easy to invoke Black Monday on its 20th anniversary as we're experiencing a sell-off, but there really is no parallel with today.' - Hugh Johnson, chief investment officer at Johnson Illington Advisors But in truth, last Friday's sell-off, which caused the bluechip index to give up on a percentage basis only a tenth as much as investors lost in the infamous Black Monday crash 20 years ago, was more reminiscent of much more recent history, namely the early weeks of last August, when the unknowns of the ramifications of the burgeoning global credit crisis were turning investors' euphoria over new record highs in the US equity markets into fear, uncertainty and the risk aversion that goes with it. 'It's easy to invoke Black Monday on its 20th anniversary as we're experiencing a sell-off, but there really is no parallel with today,' observed Hugh Johnson, the chief investment officer at Johnson Illington Advisors. 'Back then, the markets had been churning their way down for a while, and you could sense the vulnerability as fear on the trading floor built higher and higher over the course of a few weeks. But in the case now, you have to remember that, just last week, investors - and Wall Street economists - were talking about having a Goldilocks economy, a soft landing,' he said.

Federal Reserve chairman Ben Bernanke started to burst that bubble last Monday when he said that the drag from housing was worsening, and would hit growth in the fourth quarter and in 2008, and his warning was soon echoed by corporate profit outlooks.

Leading companies such as Caterpillar, 3M and Schlumberger beat third quarter estimates, but offered cautious earnings forecasts for the fourth quarter, leading to renewed concerns over the spread of the credit crisis beyond the financial sector.

But while the previous weeks' euphoria seems to have clearly been out of touch with the realities of what remains a stock market still vulnerable to the unknowns surrounding the impact of last summer's credit crisis, to say nothing of skyrocketing oil prices that have risen to potentially crippling levels and have oil analysts speculating on when the price of a barrel of light sweet crude might hit triple digits, many other of the market's fundamentals appear far too solid to invoke the spectre of anything resembling a Black Monday-like panic.

'Last week's downturn was more a function of the sharp run-up in share prices over the past several weeks and over-stretched positive expectations than fear that we're about to get into crisis mode again,' said Tobias Levkovich, Citibank Smith Barney's chief investment strategist.

'Various measures of credit market distress have eased lately, including increased functionality in commercial paper and even high-yield debt markets,' he noted. And unlike the last period of severe turmoil in credit markets in the fall of 1998, commodity prices are rising and economic activity abroad is strong, Smith Barney chief economist Steven Weiting wrote last week.

So, while Wall Street traders were quick to dismiss the potential for a crash of epic proportion, investors' new-found caution and sober outlook is likely to result in more selling and bearish risk aversion, with the potential for a 10 per cent sell-off such as the market experienced in the month between July 16 and Aug 16.

'I think everyone was just a little too eager to say that we'd put the liquidity crisis behind us and the worst was over,' said Richard Maclemore, a money manager at Goodman Securities. 'Then, when we get a few of our major companies saying that it's not just going to hit the third quarter earnings, but that the fourth quarter isn't going to look too good either, you get a quick 'uh-oh' reaction, which is what we saw on Friday,' he said. Uh-oh indeed.

The Dow Jones Industrial Average sank 366.94 points, or 2.64 per cent, to 13,522.02 on Friday. The S&P 500 was off 39.45 points, or 2.56 per cent , at 1,500.63, and the Nasdaq Composite plunged 74.15 points, or 2.65 per cent , to 2,725.16. Friday's firesale brought an abrupt end to the major averages' five-week winning streak.

For the week, the Dow and the S&P 500 each lost 4 per cent, and the Nasdaq gave back 2.9 per cent. It was the worst downturn for the indices in two months. The only things that rose last week were negative indicators. The CBOE Volatility Index, often called the fear index, added 24 per cent on Friday to a reading of 23, its highest in a month. Oil surged briefly to a record US$90 a barrel and gained 6 per cent for the week, while two-month Treasury bills rallied the most since Sept 11, 2001.

This shows that investors have re-embarked on a flight-to- quality trade. The week's wave of earnings reports could offer some relief, as several major names from outside the disastrous financial sector announce their third-quarter results and offer outlooks for coming quarters.

'It would set a lot of minds at ease if some of these companies say that next quarter isn't looking too bad,' said Mr Johnson. As many as 163 more S&P 500 companies are scheduled to report this week, including six Dow components.

Thus far, with 121 S&P 500 companies having reported over the past week, growth expectations for the third-quarter earnings season have sunk to negative 0.1 per cent, compared with expectations for earnings to grow 3.6 per cent on Oct 1

 

GLOBAL MARKETS-Asian stocks sink on US worries, dollar hits low



HONG KONG, Oct 22 (Reuters) - The dollar slumped to a record low and Asian stocks suffered their biggest fall in two months on Monday after weak U.S. corporate results renewed concerns about a housing market slump damaging the world's largest economy.

Investors in Europe were also in a negative mood, with stock futures and financial bookmakers pointing to sharp opening declines for Britain's FTSE 100 <.FTSE>, the German Dax <.GDAXI> and the French CAC 40 <.FCHI>. [nL2224324] But flight to safety boosted government debt, driving the 10-year yield for Japanese bonds to a one-month low and helping gold claw off the session trough to within easy reach of a 28-year high set Friday.

Traders said shares took their cue from Wall Street, which notched up its biggest fall in two months on Friday, a slide made more unnerving as it marked the 20th anniversary of 'Black Monday', the 1987 stock market crash.

The dollar was also sold after the tumble in U.S. stocks and following the Group of Seven's apparent indifference over the weakness of the currency. The finance ministers and central bank heads of the G7 countries met in Washington on Friday.

[ID:nN19381333] "The G7's statement effectively gives a green light to continue selling the dollar," Michael Woolfolk, senior currency strategist at the Bank of New York Mellon, said over the weekend.

At 0618 GMT, MSCI's measure of Asia Pacific stocks excluding Japan <.MIAPJ0000PUS> had lost 2.3 percent, its steepest fall since Aug. 16, while Tokyo's Nikkei <.N225> fell 2.2 percent to a four-week closing low.

EXPORTERS DOWN Weak U.S. results and comments from Caterpillar , the worlds top maker of earth-moving construction and mining equipment, set the downbeat tone.

In the strongest comments yet suggesting the housing slump was spreading to other parts of the U.S. economy, Caterpillar said on Friday several key U.S. industries it serves were in recession.

"It appears investors were panicked by what was seen as the first tangible evidence that the housing slump and credit market crisis were negatively impacting growth in the broader economy," said Guy Hutchings, chief executive officer at MFS Investment Management in Australia.

Exporters bore the brunt of the selloff, hurt by the double-whammy of a weaker dollar and growing worries about the health of the U.S. economy, the region's top export destination.

A falling dollar makes exports from Asia relatively more expensive and lowers the value of overseas sales, factors that further undermined some of the region's major exporters.

Honda Motor <7267.T> dropped 2.1 percent, Canon Inc <7751.> lost 1.0 percent and Hyundai Motor <005380.KS> fell 1.5 percent.

Banks, which have been weighed by worries about a global credit squeeze, were also hit.

Australia's Macquarie Bank , South Korea's Kookmin Bank <060000.KS>, Hong Kong's HSBC <0005.HK> and Singapore's DBS all lost ground.

Adding to investors woes, energy stocks such as INPEX Holdings <1605.T> and oil-and-gas producer Woodside Petroleum were not spared after oil extended its decline.

Investors cashed in on crude's recent rally to a record high above $90 a barrel, but simmering geo-political tensions and the weak dollar meant that further downside was likely to be limited.

U.S. crude fell 65 cents to $87.95.

Among individual stocks, Australia's Aristocrat Leisure slumped 14.6 percent after the gaming machine maker disappointed investors by saying it expected 2007 profit to be in line with last year. [ID:nSYU003320] DOLLAR SINKS The dollar hit a record low against a basket of major currencies <.DXY> and carved out a six-week low near 113.20 yen before recovering slightly. The euro jumped to a record high of about $1.4350.

The low-yielding yen also firmed against the euro as it tends to benefit from risk aversion because it is often used as the funding currency for high-yield investments. So when those are reversed, the investors buy back into the yen.

"We didn't see any surprises from the G7, and weak stocks are continuing to drag on the dollar," said Hideaki Inoue, forex manager at Mitsubishi UFJ Trust and Banking.

"Risk aversion is a big driver at the moment." But weakness in equities boosted safe-haven Japanese government bonds (JGBs). The yield on the benchmark 10-year JGBs fell 2.5 basis points to a five-week closing low of 1.575 percent.

Spot gold rose above $760 an ounce after steadying from a slide to $754 and was not far off a peak of $770 set on Friday.

 

Only India still green. However, they had gone through a more painful path than most of Asia.

 

^AORD	All Ordinaries	Australia	6,589.400 1:25PM SGT	133.900 (1.99%)	Components, More
^SSEC	Shanghai Composite	China	5,796.635 11:30AM SGT	21.412 (0.37%)	Components, More
^HSI	Hang Seng	Hong Kong	28,720.83 12:35PM SGT	744.22 (2.53%)	Components, More
^BSESN	BSE 30	India	17,587.53 1:10PM SGT	27.55 (0.16%)	More
^JKSE	Jakarta Composite	Indonesia	2,465.907 1:25PM SGT	97.845 (3.82%)	Components, More
^KLSE	KLSE Composite	Malaysia	1,370.17 Oct 19	6.15 (0.45%)	Components, More
^N225	Nikkei 225	Japan	16,421.22 1:05PM SGT	393.15 (2.34%)	More
^NZ50	NZX 50	New Zealand	4,316.313 Oct 19	3.159 (0.07%)	Components, More
^STI	Straits Times	Singapore	3,667.66 12:30PM SGT	80.32 (2.14%)	Components, More
^KS11	Seoul Composite	South Korea	1,903.19 1:25PM SGT	66.91 (3.40%)	Components, More
^TWII	Taiwan Weighted	Taiwan	9,347.39 1:25PM SGT	264.33 (2.75%)	More

 

DBS Vickers

STI?s technical structure has weakened during the past week. The daily stochastics, MACD and 14-day RSI have all turned down while the STI itself fell below the 15-day MA last Friday, which is a leading indicator of a correction.

Our earlier technical view of a final rally towards 4100-4200 before correction sets in is challenged. Instead, the likelihood of a peak at 3906 (trend channel return line) has increased. Expect a correction that will retrace 38.2% of STI?s ascend from 2190 (Oct 28 2005) to 3906 (October 10 2007). A close below 3665 confirms a correction. In this case, our downside target for the STI is a test of the 23.6% retracement level at 3500, followed by the 38.2% retracement level at 3250.

 

Those who are daring to pick up the bargain during opening 0.5 hours can cash out for decent profit now.
I queued for a few counters, but no luck.

 

Immediate outlook: The Straits Times Index?s (STI) ended the week at 3,747.98, 109pts or 2.8% lower week-on-week. Last week, there were 2 inside days, which suggest that the fight between the bulls and bears are pretty even. Now that the market has shown the way, 3,906 is likely the peak for this uptrend. The fall below its 3,780-3,800 support also is bearish for the index in the near term. The sell signals on both its MACD and RSI further supports this negative view. For the upcoming week, the STI is expected to continue to ease to test its next support at 3,660-3,688, followed by 3,550-3,575.

Medium-term outlook (2-6 months): The index tested the LT middle band resistance at 3,780-3,850 but failed to break above it. The index has also formed a bearish pattern called the Evening Star pattern. This pattern signifies a top in the current trend. However, indicators appear mixed at the moment. There is a negative divergence on the RSI but the  MACD has maintained its buy signal. Therefore, it is not expected the index to breakout above the middle band resistance this time round. It needs to recuperate and build a base before attempting to take out the said resistance. The strong support for the index can now be found around the 3,500 support followed by 3,260.

 

State funds are set to make a bigger wave in global financial markets and the world economy - and Singapore's are in the leading pack, according to a recent study by London-based Standard Chartered Bank and Oxford Analytica, a consulting firm also based in London. Singapore is not just on the list of Super Seven Sovereign Wealth Funds (SWFs) with assets valued over US$100 billion, it is also the only country that boasts two SWFs - the Government of Singapore Investment Corporation (GIC) and Temasek - on the list. With estimated assets of US$215 billion in equities, real estate, commodities, foreign exchange and other investments, GIC is the third largest SWF in the world, behind the United Arab Emirates's Abu Dhabi Investment Authority fund (US$625 billion) and Norway's Government Pension Fund (US$322 billion).

China's Investment Corporation, which boasts assets of US$200 billion, is the 5th largest SWF, while Malaysia's Khazanah Nasional is the 12th biggest with assets valued at US$17.9 billion. Ranked seventh, Temasek controls assets worth about US$108 billion as of March this year. While smaller than GIC, Temasek put on a better showing than GIC last year, posting growth of 35 per cent against GIC's 9.5%. Temasek was the fourth fastest growing SWF in 2006, following Chile's Economic and Social Stablisation Fund (up 100%), Russia's Stabilisation Fund (96%) and Kazakhstan's National Fund (36%). While emerging economies dominate the list of 20 rising SWFs, three state funds from developed countries are also represented. Apart from Norway's, they are the United States's Permanent Reserve Fund (US$40.2 billion) and Canada's Alberta Heritage Savings Trust Fund (US$16.4 billion). (BT)

 

On another quite unlikely but possible scenerio, if....that is if....George Bush decides to stage a war with Iran or just even send a couple of aircraft carrier to the gulf region on high alert or code red....wonder what sort of crazy prices will the crude oil and gold be like.

 

On the local front, we have a handful of company reporting this week as well: M1, CapitaLand, Keppel Land, Keppel Corp, DBS & Chartered Semiconductors. There are a couple of local macro data releases this week, Sep CPI (Tuesday) and factory output (Friday). Against the backdrop of higher energy costs & food supply disruptions, Singaporeans are wondering how high the CPI will go up to. The consensus forecast is for Sep CPI to hit 3.2% yoy, the highest since the Asian financial crisis over 10 years ago while factory output is expected to slow to 4.3% last month from 13.8% yoy in August.

This is not a week for the faint of heart because we will start the trading week with big fall across the region this Monday morning. Looking beyond, will the slew of generally strong 3Q earnings reports be seen an excuse to take profit after the record run or is this another opportunity to re-enter? Keep an eye on the US dollar, oil, China, India and of course the US market.

 

Broke the -100 index point!!!

Will it dive for the -3% mark?!

 

IMHO, this volatality will cool off very fast.

 

After several weeks of record breaking run, it is inevitable that equity prices correct. After all the STI has risen some 918 pts or 23% since the mid-August correction. Last week, it was a combination of rising oil prices, worries about corporate earnings, the return of global credit crunch and that fact that last week was the 20th anniversary of the ?87 market crash gave investors the excuse to take profit. A lower-than-expected September non-oil domestic export (NODX) report did not help market sentiment either. NODX rose by 2.2% yoy last month vs. the consensus estimate of 8.1%. The STI ended the week at 3748 on Friday, a loss of 109 pts or 2.8% wow. Volume traded fell 15% to an average of 2.7bn shares/day while the value traded rose nearly 5% wow to US$1.93bn/day. All sectors with the exception of manufacturing (+0.6% wow) fell with the decline led by properties (-5.1%).