Tuesday, September 6, 2011

KLCI: Europe's Headwinds To Dampen Sentiment

Bursa Recap: KLCI falls 11 points amid regional markets slump
The FBM KLCI fell 0.7% to 1463.1 but the decline was relatively mild against its regional peers such as KOSPI (-4.4%), HSI (-3%), TWSE (-2.7%) and FSSTI (-2.5%). The sluggish performance was attributable to renewed fears of a recession in the U.S. following zero employment growth in Aug jobs data, sustained worries about the euro zone debt crisis and weak China PMI for services.

Sentiment was further hurt by heavy selldown when Europe markets opened as major European banks nosedived after being named in a U.S. mortgage-related lawsuit, while a defeat for the party of Germany’s chancellor in regional elections ignited concerns that opposition is growing against bailouts for debt-saddled European countries.

FBM KLCI Outlook: Europe’s headwinds to dampen sentiment
Given the external woes and a disappointing August reporting season, we continue to advocate risk-averse investors to stay defensive or sidelines. Alternatively, for risk-takers, adopt a short term trading oriented approach to buy on sharp falls in share prices and sell into any rebound.

Immediate support levels are 1445 (lower Bollinger band), YTD low of 1423 and 1400 psychological mark while resistance zones are situated near 1470 (10-d SMA), 1484 (mid Bollinger band) and 1500 psychological mark.

Daily KLCI Shows More Consolidations Near The Lower Bollinger Band
FBM KLCI 06-09-2011

Source: HLeBroking

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