Oil and Gas play dropping Straits Times Index; What next?
Straits Times Index pulled down by Oil and Gas play
Straits Times Index STI is down 1.17% at the moment in line with weakness in major stock markets. Internally the weak hands are those in the Oil and Gas sector. Leading the fall are:
A. Keppel Corp – 3.13%
B. Sembcorp Indust – 2.41%
C. Ezion – 6.45%
This should not be a surprise since crude oil is making new 52-week low and in its 4th month downtrend.
However there is no bullish reversal pattern so we expect the trend to continue although there may be some retracement because of short-covering or profit taking.
@terraseeds Wow! I hit +1110 pips on WTI. Congrats for those who took this tade at $91+ That’s a lot of $$$.
— victoria yam (@PatissierYam) October 15, 2014
The real market movers
Coming back to the stock market however, investors should really be worried because the big boys (largest stocks by market capitalisation) have not made their move yet.
The largest ones are (see heatmap):
- Jardine Strategic
- Jardine Matheson
The next risks to the market will come from financial risk and ebola (where damage to the stock market and economy comes not only from infection and pandemic but also to social distancing policies that are meant to curb its spread):
Too big to fail is likely to prove a costly epithet for the world’s biggest banks as regulators demand they increase holdings of debt securities to cover losses should they collapse.
The shortfall facing lenders from JPMorgan Chase & Co. to HSBC Holdings Plc could be as much as $870 billion, according to estimates from AllianceBernstein Ltd., or as little as $237 billion forecast by Barclays Plc.
The Ebola crisis in the U.S. took another alarming turn Wednesday with word that a second Dallas nurse caught the disease from a patient and flew across the Midwest on an airliner the day before she fell ill, even though government guidelines should have kept her off the plane.