KLCI: +0.20% to 1806.6
JCI: +0.82% to 4486.1                           SET: -0.68% to 1425.2
HSI: -0.68% to 22881                             HSCEI: -0.83% to 10474
Nifty: -0.45% to 6187.3                          ASX200: -0.22% to 5422
Nikkei: -0.76% to 14228                        S&P500: -1.32% to 1747.2
      
MARKET OUTLOOK:
By Joshua Tan, Head of Research

Macro Data

USA:

Consumer confidence in the U.S. fell for the sixth week in a row, reaching the lowest level in a year as Americans struggled to make ends meet. The Bloomberg Consumer Comfort Index declined to minus 37.9 in the week ended Nov. 3, the worst reading since October 2012, from minus 37.6. The one-week drop was the smallest since the partial government shutdown ended in the middle of last month.

Gross domestic product rose at a 2.8 percent annualized rate after a 2.5 percent gain the prior three months, a Commerce Department report showed today in Washington. The median forecast of economists surveyed by Bloomberg called for a 2 percent advance. Consumer spending climbed 1.5 percent, the smallest increase since 2011. The biggest gain in inventories since the first three months of 2012 risks holding back production in the current quarter, which began with a 16-day partial shutdown of the federal government.

Jobless claims decreased by 9,000 to 336,000 in the week ended Nov. 2 from 345,000 the prior period, the Labor Department reported today in Washington. The median forecast of 53 economists surveyed by Bloomberg called for a decrease to 335,000. No states estimated their data last week, and there was nothing unusual in the figures, the Labor Department said.

Eurozone:
Policy makers meeting in Frankfurt today reduced the main refinancing rate by a quarter point to 0.25 percent. The decision was predicted by three of 70 economists in a Bloomberg News survey. The ECB kept its deposit rate at zero and trimmed the marginal lending rate to 0.75 percent.

German industrial production dropped in September, signaling that growth in Europe’s largest economy may have cooled in the third quarter. Output, adjusted for seasonal swings, fell 0.9 percent from August, when it rose a revised 1.6 percent. Economists forecast no change, according to the median of 36 estimates in a Bloomberg News survey. Production advanced 1 percent from a year earlier when adjusted for working days.

Australia:
Australian employers cut full-time workers in October by the most in more than a year, sending the local dollar lower as traders increased bets the central bank will keep interest rates at a record low. The number of full-time jobs declined by 27,900, the statistics bureau said in Sydney today, the most since June 2012. The total number of people employed rose by 1,100 -- less than the 10,000 increase expected in a Bloomberg News survey -- as part-time employment increased by 28,900. The jobless rate held at a revised 5.7 percent.

Thailand:
Consumer confidence index declined for the seventh consecutive month to 7.6 in October, hitting a 19-month low. The index stood at 77.9 in September. Consumers had been less confident as a result of concerns over local political tension and Bank of Thailand’s recent downward revision of the country’s 2013 GDP estimate, according to a survey by the University of the Thai Chamber of Commerce.

Malaysia:
Bank Negara Malaysia retained its policy interest rate a 3%, the same stance since May 2011, in order to support economic growth and contain inflation pressures.

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Regional Market Focus

Singapore

• The benchmark STI closed flat at 3.202.10 (-0.01%). The 1.8bn shares traded were worth S$0.9bn in value.
• The FTSE ST Mid Cap Index declined -0.02% while the FTSE ST Small Cap Index declined -0.37%. The top active stocks were SingTel (+0.26%), Keppel Corp (+0.83%), Genting Singapore (-2.65%), DBS (+0.18%) and SembCorp Marine (+0.23%).
• The STI is expected to remain muted today, due to continued market uncertainty.
• We peg key near term support at 3,100 levels.
• Top Picks are DBS (Accumulate, TP: S$17.50), SingTel (Accumulate, TP: S$3.99) and Keppel Corp (Accumulate, TP: S$12.07). Deep Value Plays are Amara (Buy, TP: S$0.74), Boustead (Buy, TP: S$1.94) and Courts (Buy, TP: S$1.03).

Thailand

• Thai stocks seesawed between positive and negative territory on Thu before the composite SET index finished the session down 0.68% after data showed Thailand’s consumer confidence index hit a 19-month low due to domestic political worries.
• US equities ended the session lower on Thu after data showed US GDP grew by 2.8% in 3Q13, beating market forecast of only 2%, raising investor concerns about an earlier-than-expected tapering of the US Federal Reserve’s QE program while European Central Bank (ECB) cut its main refinancing rate by 25 bps to 0.25%, sending euro lower and helping US dollar regain ground. Eyes will remain on US employment data due out today.
• In Thailand, the draft amnesty bill is tabled for its first reading in the Senate today. A group of senators who have opposed the debate of the bill today said they will not attend the meeting and the meeting may therefore be adjourned due to a lack of quorum. Democrat MP Suthep Thuagsuban gave an ultimatum to the government that it will set up a people’s court to issue verdict on Shinawatras if the blanket amnesty bill is not withdrawn before 1800 hrs on Nov 11, 2013. In our view, domestic political tensions would continue to weigh on sentiment in Thai stocks. Today we expect a trading range of 1400-1440 points for the SET index.
• Today we peg resistance for the SET index at 1435-1445 points and support at 1420-1400 points.

Indonesia

• The Jakarta Composite Index (JCI) advanced Thursday (07/11), despite mostly negative notes in Asia, as third-quarter earnings from Jakarta-listed companies and increased foreign exchange reserves supported the composite index. The JCI gained 36.349 points, or 0.82%, to finish at 4,486.109. Miscellaneous industry sector – which index rose 1.90% - led gains that included eight of the 9 major industry sectors, followed by finance sector with 1.12%-rise, and mining sector with 1.07%-climb. 28 of the 45 blue-chip shares traded higher on Thursday, bringing the LQ45 index a 1.09%-gain to end at 752.248. From the economic front, Bank Indonesia reported its foreign-currency holdings increased to USD 97 billion last month, the highest level since June, from USD 95.7 billion in September. For every share declining, almost two advanced Thursday on the Indonesia Stock Exchange, where 3.1 billion shares worth IDR 4.51 trillion changed hands on the regular board. Foreign investors posted net sale of IDR 95.37 billion.
• Indonesian stocks will likely trade lower today, after negative closes on Wall Street overnight and as Asian markets started with losses this morning. Investors may also take cautious stance ahead of the US employment data release later in the day. We expect the JCI to move lower today, with support and resistance at 4,434 and 4,521.

Sri Lanka

• The trading day ended on an adverse sentiment, leading the indices to drown further and extended its losses for the fifth consecutive trading day. The market trended downwards from its early hours falling to a day’s low of 5,869.36 experiencing a loss of 37 points, however as at the closure the index settled slightly higher at 5,870.47 (down by 35.71 points or 0.60%) while indicating a lowest level since  8th October 2013. The S&P SL20 index closed the day 11.18 points below to close at 3,243.71 or 0.34%. With regard to the movement in share prices, price losers slammed the price gainers by 113:48. The aggregated turnover for the day which amounts to LKR 688.04Mn, indicating an increase of 20.33% as against its previously recorded. During the day a total of 42.00Mn shares changed hands resulting in a gain of 91.02% against the previous day. Under the sectorial round-up, Beverage Food & Tobacco (BFT) sector stood on top providing LKR 427.33Mn and Diversified Holdings (DIV) sector emerged second contributing LKR 104.76Mn. Notably, the two sectors BFT & DIV collectively accounted to nearly 80.00% of the daily aggregated turnover. Foreign participants were bullish during the day, resulting in a net foreign inflow of LKR 2.51Mn; foreign buying for the day amounted to LKR 459.35Mn and selling amounted to LKR 456.84Mn. The year to date net foreign inflow currently stands a LKR 23.57Bn. With regard to the local FOREX, the USD currently stands at LKR 132.72/- selling and LKR 129.46/- buying.

Australia

• The Australian share market on Thursday slipped, dragged down by the ANZ and National Australia Bank which paid out their final dividends. The benchmark S&P/ASX200 index was down 11.8 points, or 0.22 per cent, at 5,422.
• Today (08/11/13), the Australian shares look set to open lower following falls on Wall Street where Twitter made its market debut. Wall Street's falls came after data surprisingly showed the world's biggest economy grew at an annual rate of 2.8 per cent in the third quarter, well above the 1.9 per cent projected by analysts.
• Locally, in economic news on Friday, the Reserve Bank of Australia releases its statement on monetary policy.
• In equities news, Echo Entertainment, Commonwealth Bank, Hills Holdings and Ardent Leisure have annual general meetings scheduled.

Hong Kong

• HSI dropped 155 points or 0.68% to 22,881. CEI lost 87 points or 0.83% to 10,474. Trading volume decreased to HKD45.6 billion.
• HSI failed to retain at 23,000 levels and recorded 4 days losing streak. HSBC (5.HK) and China financial sector led the indexes down.
• PBOC stopped reverse repo and the rumor that 4 largest China banks’ new loan in October drop to year low, China banking sector under-performed. Bankcomm (3328.HK) and Minsheng Bank (1988.HK) lost 1.8% and 2% respectively.
• China power sector under-performed with Huadian Power (1071.HK), China Res Power (836.HK) and Huaneng Power (902.HK) declined 1.7-2.9%.
• Richfield GP (183.HK) slumped 12.6% after announced potential disposal of England property.
• CEC Int’l Hold (759.HK) gained 0.6% after climbed more than 40% yesterday. But the day high of share price is HK$1.77 (+12.7%).
• Technically, the next resistance and support for HSI are 23,000 and 22,640 respectively.