Another woeful day sees local index mirror Hang Seng swings before ending 34 points down
By R SIVANITHY
SENIOR CORRESPONDENT
WHO wants to read 'buy' reports now that the party is over?' said a dealer yesterday, adding that 'it doesn't matter what the stories are now - and there are still plenty going around - nobody wants to believe them'.
That pretty much sums up the current sentiment in the local stock market which, in turn, is reflective of investor attitudes to stocks worldwide following Wall Street's sharp correction over the past five weeks.
Yesterday's session, for instance, was hugely volatile and therefore not for the faint-hearted. Much of it was driven solely by wild swings in the Hang Seng Index since the other main barometer that traders here use for direction, the US futures market, was closed for Thanksgiving.
Given that the Hang Seng first rose 400 points but closed 613 or 2.3 per cent lower at 26,004, it perhaps came as no surprise that the Straits Times Index (STI) was dragged along with it, first gaining 27 before losing all of this by lunchtime. The selling accelerated after lunch, leaving the index a net 34.32 points or just over one per cent down at 3,312.88.
The broad market duly followed suit, recording only 129 rises versus 344 falls with 355 untraded or unchanged counters, excluding warrants.
In fact, warrants featured prominently in the top volume, top absolute gainers and top percentage gainers lists, thanks mainly to the volatility in the Hang Seng and STI. Noticeably absent from these lists were the penny stocks, which until very recently were prime trading targets for punters and house traders.
The STI has now lost almost 600 points or 15 per cent since an all-time intraday high of 3,906 on Oct 10. The all-time closing high was 3,875 on Oct 11, giving a current loss of 14.5 per cent.
The UOB Sesdaq Index, in the meantime, managed to gain 3.22 points to 206.75 despite registering 52 falls versus only 29 rises among its components. Its own all-time closing high was 302.64 on July 24, which means that its loss is much worse than the STI's, coming in at around 32 per cent.
Shipping/shipyard stocks have borne the brunt of the recent selling, perhaps not surprisingly, given that they had all surged to new highs in September-October. In yesterday's session, STX Pan Ocean collapsed by 28 cents or 9 per cent to $2.88 while Cosco Corp lost 20 cents to $5.90. STX's loss from its all-time high of $4.24 on Oct 11 is 32 per cent, while Cosco's drop from its Oct 18 high of $8.20 is 28 per cent.
Independent research outfit BCA Research looked at the minutes of the US Federal Reserve's Open Market Committee meeting on Oct 30 in which the Fed said its 25-point interest rate cut that day was a 'close call', because there were little signs that the credit crunch was hurting the economy and because upside risks to inflation remain. Astounded at the Fed's statements, BCA said the Fed has fallen far behind the curve and will have to start slashing rates aggressively soon.
It added: 'The rioting in the financial markets this month must be reversing this economic complacency. Credit conditions are tighter than they were before the Fed began cutting rates, and strains could be spreading into the prime mortgage market. Bottom line: The financial markets are warning of real economic damage, which will force the Fed to drop its concerns over inflation and provide a significant amount of additional easing.'
By R SIVANITHY
SENIOR CORRESPONDENT
WHO wants to read 'buy' reports now that the party is over?' said a dealer yesterday, adding that 'it doesn't matter what the stories are now - and there are still plenty going around - nobody wants to believe them'.
That pretty much sums up the current sentiment in the local stock market which, in turn, is reflective of investor attitudes to stocks worldwide following Wall Street's sharp correction over the past five weeks.
Yesterday's session, for instance, was hugely volatile and therefore not for the faint-hearted. Much of it was driven solely by wild swings in the Hang Seng Index since the other main barometer that traders here use for direction, the US futures market, was closed for Thanksgiving.
Given that the Hang Seng first rose 400 points but closed 613 or 2.3 per cent lower at 26,004, it perhaps came as no surprise that the Straits Times Index (STI) was dragged along with it, first gaining 27 before losing all of this by lunchtime. The selling accelerated after lunch, leaving the index a net 34.32 points or just over one per cent down at 3,312.88.
The broad market duly followed suit, recording only 129 rises versus 344 falls with 355 untraded or unchanged counters, excluding warrants.
In fact, warrants featured prominently in the top volume, top absolute gainers and top percentage gainers lists, thanks mainly to the volatility in the Hang Seng and STI. Noticeably absent from these lists were the penny stocks, which until very recently were prime trading targets for punters and house traders.
The STI has now lost almost 600 points or 15 per cent since an all-time intraday high of 3,906 on Oct 10. The all-time closing high was 3,875 on Oct 11, giving a current loss of 14.5 per cent.
The UOB Sesdaq Index, in the meantime, managed to gain 3.22 points to 206.75 despite registering 52 falls versus only 29 rises among its components. Its own all-time closing high was 302.64 on July 24, which means that its loss is much worse than the STI's, coming in at around 32 per cent.
Shipping/shipyard stocks have borne the brunt of the recent selling, perhaps not surprisingly, given that they had all surged to new highs in September-October. In yesterday's session, STX Pan Ocean collapsed by 28 cents or 9 per cent to $2.88 while Cosco Corp lost 20 cents to $5.90. STX's loss from its all-time high of $4.24 on Oct 11 is 32 per cent, while Cosco's drop from its Oct 18 high of $8.20 is 28 per cent.
Independent research outfit BCA Research looked at the minutes of the US Federal Reserve's Open Market Committee meeting on Oct 30 in which the Fed said its 25-point interest rate cut that day was a 'close call', because there were little signs that the credit crunch was hurting the economy and because upside risks to inflation remain. Astounded at the Fed's statements, BCA said the Fed has fallen far behind the curve and will have to start slashing rates aggressively soon.
It added: 'The rioting in the financial markets this month must be reversing this economic complacency. Credit conditions are tighter than they were before the Fed began cutting rates, and strains could be spreading into the prime mortgage market. Bottom line: The financial markets are warning of real economic damage, which will force the Fed to drop its concerns over inflation and provide a significant amount of additional easing.'
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