Monday, 23 April 2012

KLCI retreats in early trade, blue chips weigh

KUALA LUMPUR (April 23): The FBM KLCI retreated in early trade on Monday, weighed by losses including at Genting, Maybank and BAT.

At 9.05am, the FBM KLCI shed 1.46 points to 1,590.39.

Gainers led losers by 111 to 54, whil 103 counters traded unchanged. Volume was 109.93 million shares valued at RM38.11 million.

Asian shares and the euro steadied on Monday after the IMF secured new funding to prevent the contagion of the euro zone's debt crisis, with investors turning to Chinese data to gauge the market's resilience to risk, according to Reuters.

The contagion risk of Europe's debt problems was reduced slightly when the International Monetary Fund secured $430 billion to boost its firepower in case Europe's debt woes worsen and spill over to peripheral economies, it said.

Other factors that would play a crucial part in influencing investor sentiment this week are the policy-setting meeting of the U.S. central bank's Federal Open Market Committee, as well as earnings releases from several bellwethers. The most important will likely be Apple Inc , which reports after the market close on Tuesday.

A slowly improving U.S. jobs market and reasonably solid growth at the start of the year brightened the economic outlook and cut chances the Fed will conduct another round of bond purchases, according to a Reuter’s poll last week.

With the Fed monitoring a healing but still fragile economy, the statement expected on Wednesday will be closely watched by investors, said Reuters.

On Bursa Malaysia in early trade on Monday, among the major deciners were BAT, Genting Asas, Affin, Mah Sing, P.I.E and Telekom.

RHB Research Institute Sdn Bhd in a note Monday said that in the absence of domestic catalysts and a possible massive Bersih 3.0 rally on 28 Apr, the FBM KLCI was likely to face further consolidation amid the moderating technical readings and dwindling volume.

“Immediate resistance levels are historical high at 1,609, followed by weekly upper Bollinger band of 1622. Immediate supports are 1,579 (50-d SMA) to1,588 (30-d SMA) levels. A break below 1,579 is likely to trigger more selldown towards YTD low at 1,549,” it said.

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