Bursa Malaysia - Sentiment Damper From Potential Fed Tapering

SELL AMMB & RHB Capital

Blue chips fell into profit-taking correction mode on Monday, but lower liners and smalls cap stocks  continued  to  attract  strong  rotational  trading  interest.  The  KLCI  lost  9.88  points  to end at 1,778.36, off an early low of 1,771.65 and high of 1,788.43, as losers beat gainers 515 to  339  on  extremely  heavy  trade  of  3.15bn  shares  worth  RM2.44bn,  with  trading  on  MAS consisting nearly a third of the total volume.

Support at 1,772, Next at 1,756
The weak technical picture on the blue-chip index, clouded further by external weakness due to  potential  tapering  of  bond  purchases  by  the  US  Federal  Reserve  next  month,  should dampen  near-term  sentiment.  Immediate  support  stays at  1,772,  the  23.6%  Fibonacci Retracement  (FP)  of  the  7/2/13  low  of  1,597  to  the  all-time  high  of  1,826,  with  stronger supports  coming  in  at  1,756,  the  rising  100-day  moving  average  level,  and  1,738,  the 38.2%FR level. The 25 June low of 1,723 would act as an important pivot support. Immediate resistance  remains  at  the  1,800  psychological  level,  with  next  hurdle  at  1,814,  the  150% Fibonacci Projection (FP) of the 1,526 pivot low of18 May 2012 to this year’s 30 April high of 1,718. The next resistance would be at the all-time high of 1,826 of 6 May.

SELL AMMB & RHB Capital
AMMB  could  decline  further  on  bearish  momentum,  with  breakdown  below  the  lower Bollinger band to re-test RM7.60 (76.4%FR) support,while RM7.28 (61.8%FR) would act as stronger  retracement  support.  Resistance  is  at  RM8.12,  the  15/8/13  high.  Similarly,  RHB
Capital  may  slide  further  to  test  RM7.85  (76.4%FR)  support,  while  a  breakdown  would challenge  lower  chart  supports  at  RM7.70,  RM7.55  and  RM7.40  going  forward.  Significant
resistance is likely at RM8.44, the 61.8%FR.

Asian Stocks Subdued Before Fed’s Policy Meeting

Asian  stocks  mostly  wavered  between  gains  and  losses  Monday  ahead  of  U.S.  Federal Reserve minutes to be released Wednesday that may give further clues on when the central bank might cut back on its easy monetary policy. The subdued start to trading in Asia comes amid  ongoing  speculation  over  when  the  U.S.  Federal Reserve  will  begin  to  wind  down  its $85 billion-a-month bond buying program. Many observers expect the central bank to make a decision on the program at a key meeting of Federal Reserve policy makers next month. Japan's Nikkei share average rose on Monday as investors found buying opportunities in oil companies on rising oil futures, but trading was subdued as the market was focused on the inutes of the U.S. Federal Reserve's July policy meeting this week for more cues on when it will  likely start tapering the stimulus. Meanwhile,Hong Kong and China shares slipped, as Chinese developers fell due to renewed concerns Beijing may take further steps to cool the market after Beijing and Shanghai's July home prices posted their fastest annual growth this year. The Hong Kong Index inched down by 54.11 points or 0.24% to 22,463.70 while the Singapore’s Straits Times Index lost 24.20 points or 0.76% to 3,173.33.

 

by TA Securities

Popular posts from this blog

Malaysia Inflation to start easing end-3Q or early 4Q2011

Image
Malaysia Inflation Rose To The Fastest Pace.
Inflation is still a major concern and we expect the upward pressure to stay in 3Q2011 coming from food & non-alcoholic and clothing/footwear in  view of the festive seasons. Impact from June’s electricity tariff hike is expected to continue. But the  upward inflation pressure can be contained from stronger RM/USD and high base comparison. Nonetheless, we expect inflation to start easing by end 3Q2011 or early 4Q2011. Meanwhile, with global uncertainties flared by euro debt crisis and slower US economic recovery lingering, it has forced AxJ policymakers to focus on growth as opposed to inflation. Rates hikes could be reaching its tail end. We expect BNM to accommodate further erosion in real returns by holding OPR at 3.00% to focus on growth. But possibilities for another 25bps hike in OPR remains, as it depends on inflation outlook. Likewise SRR hike will depend on liquidity inflow. If that happen, we expect another 50bps to 100bp…
Read more

Trump’s Win – Bark Worse Than Bite?

Image
While Asian equity markets may remain soft after the surprise of Donald Trump’s win in the US presidential election, we look forward to buying opportunities. Essentially, we do not expect significant economic repercussions on Malaysia’s economy or corporate earnings, save for the indirect impact on downward biases for the ringgit vs the US dollar and on interest rates. We highlight the trough prices of our conviction picks, as well as some buying opportunities.

WHAT’S NEW
• Near-term confidence pricked. Asian equity markets have swooned on knee-jerk reactions to Trump’s surprise win; the FBMKLCI eased 1%. Despite the major turnaround in US equities after Trump’s acceptance speech which promoted national unity and stressed on fiscal stimulus (the DJI futures initially fell by as much as 800 pts before the cash DJI remarkably recovered to positive territory), investment sentiment in Asia may remain damp and to be swayed by Trump’s anti-globalisation rhetoric. Nevertheless, we do not …
Read more

FBM KLCI Technical Outlook

Image
Stocks on Bursa Malaysia snapped a three-day losing streak to end higher last Friday on bargain hunting in selected heavyweights, which saw late fund buying of Tanaga Nasional and Malayan Banking. Bargain hunting by institutional funds supported the local market but further gains were limited by fears of a better-than-expected US third-quarter gross domestic product data which will be out later of the day. Asian stock markets were mixed as they were still affected by a flurry of major corporate earnings reports across the region and the declining oil prices. The ringgit weakened further against the US dollar at 4.1970/1020 from the 4.1810/1900 recorded on Thursday, tracking the performance of emerging Asian currencies. At close, the FBM KLCI settled at 1,670.27, up 1.24 points or 0.07%, from Thursday’s close of 1,669.03, after opening 0.58 of a point higher at 1,669.61 and moved between 1,666.97 and 1,671.72 throughout the day. On a weekly basis, the benchmark index gained 0.29 of a p…
Read more