Another week of wary China-watching for the market

ELSEWHERE in this issue of BT is a story on the week's outlook for Wall Street, which essentially says the US market has been stuck in a holding pattern for months as traders wait for the Federal Reserve to raise interest rates. This is an apt description because despite setting numerous all-time highs this year, US indices have not really performed; at last Friday's close, the S&P 500 was only 2 per cent up for 2015 while the Dow Jones Industrial Average was down 0.75 per cent.

If Wall Street's return for the past seven months isn't great, then what of the local market's performance so far? We would hesitate to draw a parallel with the NYSE because the Straits Times Index (STI) has not really moved within a holding pattern; rather, it's probably more accurate to say the index has bounced around within a trading range that appears to be gradually slipping downwards.

The 4.8 per cent loss the STI has suffered for the year to date is a poor return for seven months of toiling but it is perhaps to be expected, given that prices here have always been highly dependent on the vagaries of other markets. For most of June and July, it was Greece which teetered on the edge of financial ruin (and may still topple over); more recently, it has been a crashing China stock market that has dictated the STI's direction.