AS far as blue chips were concerned, the reaction yesterday to Wall Street's overnight rise was muted, the Straits Times Index once again traversing a narrow range before ending just 1.69 points higher at 2,981.47.

As far as penny stocks were concerned, the segment continued to exhibit a life of their own independent of blue chips, this time weakening as the air from the speculative bubble surrounding many of them was quickly released following news of online trading curbs by a couple of broking firms. Excluding warrants, the advance-decline score was 148-268.

The inevitable cooling down of activity was reflected in unit volume amounting to 3.6 billion compared to Wednesday's seven billion, excluding foreign currency counters. Dollar value was $1.08 billion compared to Wednesday's $1.2 billion. The average unit value was 30 cents compared to 17 cents on Wednesday. Other penny stocks in play included Advance SCT, Informatics and Stratech.

Several dealers spoke of JEL as being the market's current main barometer, the stock having shot up from one cent a few months ago to almost 16 cents on Wednesday. News of online trading curbs by brokers - according to observers these were UOB-Kay Hian and OCBC Securities - triggered a sell-off yesterday, the counter ending 4.4 cents or 36 per cent down to 7.8 cents with 468 million done. It had traded 1.2 billion units on Wednesday when it hit an intraday high of 15.8 cents.

Apart from the slide in JEL, also notable was the debut of Global Premium Hotels, which offered shares at 26 cents each. The counter underwent a modestly positive session, trading at a high of 30 cents before ending at 28.5 cents on volume of 194 million done.

US stocks on Wednesday rose, reportedly because of better-than-expected earnings and also after assurances by the US Federal Reserve after its Open Market Committee meeting that interest rates will remain depressed until 2014. In addition, the Fed upgraded its economic forecasts for the US.

However, as OSK DMG pointed out in its comment yesterday, there were no real surprises in the Fed's actions.

"While we still maintain our view that QE3 (a third round of quantitative easing) is not imminent, we also recognise that the majority of the FOMC remains 'prepared' to undertake additional balance sheet actions to defend the dual mandate," said the broker. "As best we can judge, if the unemployment rate fails to improve or nudges back up, and/or if underlying inflation slides toward 1.5 per cent, then the prospect for further policy actions will rise notably."

Supermarket operator Sheng Siong's shares fell one cent to 47.5 cents after the release of its results. Excluding a $10.5 million gain from the sale of a warehouse, net profit from core operations for the first three months of the year was down 17.5 per cent to $8 million.

In its downgrade, broker CIMB said Q1 2012 core EPS was below expectations because of lower-than-expected gross margins. "We cut our FY2012-14 EPS by 3-8 per cent in view of this and target price (to 49 cents), still at 18 times calendar year 2013 EPS. Downgrade to 'neutral' from 'outperform' given the keen competition," said CIMB. Broker OSK DMG, in the meantime, maintained a "neutral" recommendation but lowered its target price for the stock from 46 to 45 cents.