Tuesday, November 23, 2010

KLCI below 1,500 level at mid-morning

KUALA LUMPUR: The FBM KLCI fell below the 1,500 level at mid-morning on Tuesday, Nov 23 in line with the weaker close at Wall Street and the overall decline at most key regional markets.

Asian markets, already weighed down by the property market cooling measures in Hong Kong and China's move to raise banks' reserve ratios to curb inflationary pressures, were jolted again after after Moody's Investors Service said a 'multi-notch downgrade' of Ireland's credit rating was likely after the country requested an international bailout.

At 10am, the FBM KLCI was down 4.17 points to 1,499.03, weighed by losses at DiGi, PPB, KLK, Petronas Gas and Petronas Dagangan.

Gainers trailed losers by 137 to 269, while 219 counters traded unchanged. Volume was 193.12 million shares valued at RM339.9 million.

RHB Research Institute Sdn Bhd in a note Nov 23 said as was expected, the benchmark FBM KLCI failed to penetrate the key immediate hurdle at the 10-day Simple Moving Average yesterday.

It said that added with a slower daily turnover, and a gloomier short-term outlook amid the slower 3Q GDP growth of 5.3% against the street's estimates of 5.8%, the market's trading sentiment was likely to stay sluggish in the immediate term, in our view.

Given regional markets' sentiment remains uncertain, with the volatility in currencies markets prolong, investors were expected to adopt further 'wait-and-see' strategy before deciding the next course of action, it said.

'We thus believe the market will continue to range between the 10-day SMA and 40-day SMA in near term.

'Losing of the 40-day SMA will accelerate the selling pressure and press the index towards the 1,450 level, its critical level for a major corrective wave, while breaching above the 10-day SMA of 1,510 will swing the momentum to positive, hence rechallenging the key level of 1,524.69 soon,' it said.

On Bursa Malaysia, DiGi fell 42 sen to RM24.38, PPB lost 36 sen to RM18.44, KLK was down 22 sen to RM19.80, Pharmaniaga fell 20 sen to RM5.30, Petgas fell 18 sen to RM11.08, Petdag lost 16 sen to RM10.96, Hong Leong Financial Group down 15 sen to RM8.84 and Carlsberg fell 13 sen to RM5.86.

Gainers included Hap Seng, SEG International, Kulim, S P Setia, Plenitude, Batu Kawan and F&N.

Genting Malaysia was the most actively traded counter with 12.98 million shares done. The stock added one sen to RM3.47. Other actives included Karambunai, CIMB, Axiata and Tenaga.

At the regional markets, the Shanghai Composite Index fell 1.17% to 2,850.60, Singapore's Straits Times Index lost 0.74% to 3,167.35, the South Korean Kospi Index lost 0.28% to 1,938.94, Hong Kong's Hang Seng Index opened 1% lower at 23,294.45 while Taiwan's Taiex edged up 0.04% to 8,378.13.

Japan's stock exchange was closed for the Labor Thanksgiving holiday.

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