Friday, December 16, 2011

Modest gains, but vulnerability remains for KLCI

KUALA LUMPUR (Dec 16): The FBM KLCI made modest gains at mid-morning on Friday in line with the regional markets and the higher overnight close at Wall Street, but trading remained cautious following the downgrade of seven global banks in a sign of pitfalls ahead in the global economy.

Global market sentiments could further erode after Fitch Ratings on Thursday downgraded Goldman Sachs, Deutsche Bank and five other large banks based in Europe and the United States, citing "increased challenges" in the financial markets.

At mid-morning, the FBM KLCI edged up 0.71 point to 1,464.82.

Gainers led losers by 212 to 144, while 211 counters traded unchanged. Volume was 465.08 million shares valued at RM205.78 million.

Fitch cut long-term ratings on Barclays Plc and Credit Suisse AG by two notches to 'A' from 'AA-'.

The agency cut by one notch its long-term ratings on Bank of America Corp, BNP Paribas, Citigroup, Deutsche Bank AG and Goldman Sachs Group.

At the regional markets, Japan's Nikkei225 rose 0.40% to 8,411.18, Hong Kong's Hang Seng Index added 0.45% to 18,107.95, the Shanghai Composite Index was up 0.17% to 2,184.63, Taiwan's Taiex gained 0.14% to 6,773.83, South Korea's Kospi rose 0.73% to 1,832.48 and Singapore's Straits Times Index was up 0.46% to 2,647.49.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on Friday said the FBM KLCI's resistance areas of 1,464 and 1,490 would cap market gains, whilst the weaker support areas may be located at 1,447 and 1,462.

'Despite the US markets' better tone last night, we may have a day of pre-weekend profit taking on the local index today,' he said.

On Bursa Malaysia, Dutch Lady was the top gainer at mid-morning and rose 42 sen to RM25; KLK gained 20 sen to RM22.32, Nestle 18 sen to RM56.20, BAT 16 sen to RM49.16, Dialog and Proton 13 sen each to RM2.57 and RM4.68, Orient 11 sen to RM5.25, while F&N and United PLANTATION []s gained 10 sen each to RM18.48 and RM18.50.

Decliners included Tradewinds, UMW, JT International, Panasonic, Carlsberg, Hong Leong Bank, Fibon, Shangri-La and GAB.

The actives included Proton, JCY, Dialog, Sanichi and Wijaya.

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