Market Open KLCI trends lower, sentiment remains nervy

The Edge, 25 February 2013

KUALA LUMPUR (Feb 25): The FBM KLCI trended lower in early trade on Monday as investor sentiment remained nervy.

At 9.25am, the FBM KLCI shed 0.18 points to 1,621.90.

Gainers edged losers by 87 to 84, while 130 counters traded unchanged. Volume was 84.37 million shares valued at RM44.58 million.

Among the early losers were KLK, Hong Leong Capital, S P Setia, Dana Infra, Batu Kawan IOI Corp, Carlsberg and Hong Leong Bank.

BIMB Securities Research in a market preview Monday said that trading on the local bourse will be dominated by “Polinomics” this week.

It said that whilst the absence of the highly speculated Parliament dissolution for GE13 last Friday will prolong market uncertainty, events over in the US and UK may hog the headlines as well.

Anticipated budget cuts in the US have had many experts debating on a possible derailment of economic progress in the US, said the research house.

It said as for the UK, recent downgrade by Moody’s of its credit rating to AA1 from AAA had seen the sterling pound weakening and may impact on Malaysian companies most notably Sime Darby, SP Setia and YTL Power.

As usual, knee jerk reactions are expected but will even out given time as occurred in the US back in 2011, it said.

“Meanwhile, focus will also be on Italy over the outcome of the still ongoing General Election later this week.

“With a plethora of developments, we reckon investors will be sidelined with the FBM KLCI to see some downside bias today. Immediate support is seen at the 1,615 level,” it said.

Asian shares edged higher on Monday, with investors still picking up shares battered by last week's steep plunge, while the yen fell to fresh lows on news a reflationary advocate could head the Bank of Japan next month, according to Reuters.

The news Japan's government is likely to nominate Asian Development Bank President Haruhiko Kuroda, an advocate of aggressive monetary easing, as its next central bank governor, is set to be a major factor in financial markets this week, it said.

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