Tuesday, July 26, 2011

FBM KLCI Held Hostage By U.S. Debt Deal

Bursa Recap: KLCI down 5.5 points, tracking regional markets fall
Asian markets were mostly in red, led by a 3% plunge on SHCOMP as railway shares tumbled after a deadly bullet-train accident coupled with a political stalemate over the U.S. debt limit over the weekend.

Besides, sentiment was further dampened by Moody’s downgrade of Greece’s debt rating by three notches, saying the chance of a default is now "virtually 100%". Reflecting the pessimism, the FBM KLCI lost 5.5 pts to 1559.6, triggered by selling pressures on GENTING (-22 sen to RM10.50), CIMB (-8 sen to RM8.45), PBBANK (-6 sen to RM13.36), TENAGA (-5 sen to RM6.22) and YTLPOWR (-4 sen to RM2.04).

FBM KLCI Outlook: Held hostage by U.S. debt deal
Although the debt ceiling talks have no fresh progress so far, investors view the deadlock as temporary with expectations that the lawmakers eventually would come out with a last-minute consensus. Nevertheless, as negotiations are still proceeding, world markets will continue to be held hostage by the U.S. debt deal.

As technical indicators are weakening amid a breakdown of 1561 points (50-d SMA), there is greater pressure that KLCI may retest last week’s low of 1552 points. A breach below 1552 points will exert more selling force towards 1543 points (100-d SMA) and 1536 (50% FR from 1474-1597) points. Upside resistance levels are 1570 (30-d SMA), 1576 (mid Bollinger band) and record high 1597 points.

KLCI Is Building Base Near The Lower Bollinger Band
FBM KLCI 26-07-2011



Source: HLeBroking

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