Tuesday, September 13, 2011

KLCI stages mild rebound amidst cautious trade

KUALA LUMPUR: The FBM KLCI staged a mild rebound on Tuesday, Sept 13 after having fallen the most in a month just a day earlier following the regional sell down.

However, trading sentiment at most key regional markets remains fragile, with China and Taiwan resuming trade after the mid-autumn holiday in negative territory, while the Japan and Singapore markets edged upwards nervously.

The FBM KLCI gained 4.71 points to 1,450.97 at 10am, lifted by gains at select blue chips.

Gainers led losers by 199 to 100, while 156 counters traded unchanged. Volume was 125.88 million shares valued at RM89.99 million.

Asian stocks steadied and the euro held above a seven-month low against the dollar on short-covering on Tuesday, after a report that Italy may get financial support from China lifted Wall Street in late trade but did nothing to ease fears that Europe is descending into a banking crisis, according to Reuters.

Mounting fears of a Greek debt default, sharp drops in European shares -- especially of French banks due to their sovereign debt exposure -- and a surge in Italian bond yields meant any rally would be short-lived as broader sentiment remains fragile, it said.

At the regional markets, Japan's Nikkei 225 edged up 0.31% to 8,561.97 and Singapore's Straits Times Index added 0.87% to 2,767.52.

Meanwhile, the Shanghai Composite Index fell 1.53% to 2,459.62 and Taiwan's Taiex lost 2.02% to 7,456.74.

The Hong Kong and South Korean stock markets were closed for the mid-Autumn Day public holidays.

BIMB Securities Research in a note Sept 13 said that whilst US President Barack Obama's proposal to create jobs remained rather doubtful in the hands of the Congress, traders pinned their hopes that China may come in to take up some of the European nations' debts.

As a result, Wall Street saw some last minute buying to push the DJI average up to above the 11,000 mark again, it said.

Regionally, overall performances had been hampered by Wall Street's slump last Friday exacerbated by another poor session over in Europe, it said.

'Locally, Bursa Malaysia which had been quite resilient finally relented to the selling pushing the FBM KLCI to below the 1,450 level.

'Though we expect the market to improve today, we doubt there to be any renew buying in the absence of fresh catalysts,' it said.

Among the gainers on Bursa Malaysia at mid-morning, Shell rose 19 sen to RM9.99, PPB, HLFG and Esso 10 sen each to RM16.72, RM11.28 and RM3.64 respectively, MISC nine sen to RM6.90, while BAT, Theta, Lafarge Malayan Cement and Petronas Gas gained eight sen each to RM43.20, 54 sen, RM6.91 and RM13.58 respectively.

Top Glove fell 15 sen to RM41.13 at mid-morning on account of the bleak outlook for the glove maker, and analysts' views that it lacked any clear catalyst for now.

Other decliners included DiGi and YTL Cement that fell six sen each to RM31.64 and RM4.40, Malayan Flour Mills and RHB Capital down five sen each to RM6.95 and RM8.21, while YNH Property, Media Prima, Mamee and Pos Malaysia lost four sen each to RM1.62, RM2.55, RM4.20 and RM2.80 respectively.

The actives included Takaso, Digista, Systech, Dutaland, Ramunia, Key West and Denko.

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