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Straits Times 3,183.26 -22.20 -0.69%
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Global Markets Up On US Fiscal Cliff Hopes
Singapore Market Commentary | 23 November 2012
By: Jade Lee
Articles (97) Profile

Once again, there is nothing new under the sun. The Eurozone debt crisis continues with the Troika failing to agree on how to get Greece’s debt down to a sustainable level with a third meeting set on 26 Nov. On another continent, hopes are high that the US government will strike a deal to avoid the fiscal cliff, leading to a strong rebound by the S&P 500 which broke through its support-turned-resistance level of 1,360 after touching the trend line support of 1,340. As S&P 500 is still within the uptrend channel, the index is likely to break through its psychological level of 1,400.

Not much of a surprise, China’s once-a-decade power transition failed to excite the Chinese market with Shanghai Stock Exchange Composite Index dropping around 3% for the past 2 weeks. However, speculation that China central bank will lower the reserve ratio boosted investor confidence, causing the Shanghai Composite Index to recover ground from levels below 2,000 on 21 Nov.

Back home, Genting Singapore PLC closed at a 2-year low at $1.20 on 15 Nov after analysts’ downgrade. At the same time, Olam International dropped sharply after short seller Carson Block from Muddy Waters questioned about its accounting methods. The stock fell 11.2% to an intra-day low at $1.545, and clawed back some of its decline to close at $1.61 on 20 Nov. Meanwhile, our local bourse may likely to track the US indices and move its way up to the psychological level of 3,000.

All in all, markets will continue to remain volatile unless concerns about the lethargic US economy and Europe’s debt woes start to ease or Beijing introduces more measures to boost the economy. Amid these uncertainties, we can only hope that the traditional year-end rally will happen again.

Jade manages and oversees a portfolio of stocks which are mainly focused on the mining and property sectors at Shares Investment.

Please click here for more information about this author.


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