Market Overview 24th Nov 2011

Thursday,  24th Nov. The FBM KLCI retrace for the third session continuously amid recent weakness on regional stock index. Other news to follow.

"-U.S. stock indexes lost more than 2% of their value Wednesday, and the S&P 500 Index slid for a sixth day, after a poorly received German debt sale again pushed up European bond yields. The Dow Jones Industrial Average DJIA -2.05%  fell 236.17 points, or 2.1%, to 11,257.55. In its longest losing streak since a seven-session drought that ended Aug. 2, the S&P 500 Index SPX -2.21%  lost 26.25 points, or 2.2%, to 1,161.79, with energy hardest hit among its 10 industry groups. The Nasdaq Composite COMP -2.43%  declined 61.20 points, or 2.4%, to 2,460.08."

"-Most Asian share markets traded with sizeable losses Wednesday after a poor manufacturing survey from China added to worries about the trajectory of global growth. Hong Kong’s Hang Seng Index HK:HSI -2.12%  fell 2.1%, and the Shanghai Composite Index CN:000001 -0.73%  swung from mild gains to finish down 0.7%. The Australian S&P/ASX 200 index AU:XJO -1.98%  ended 2% lower, while the Korean Kospi KR:0100 -2.36%  fell 2.4%. Japan’s stock markets were closed for a holiday."

"-Crude-oil futures declined Wednesday as euro-zone debt fears shook markets once again, and as data from the U.S. and elsewhere came in mostly negative. The government’s latest weekly report on petroleum inventories showed a surprise decrease in crude stockpiles, providing mild support for prices. Crude for January delivery CL2F -0.29%  declined $1.84, or 1.9%, to end at $96.17 a barrel on the New York Mercantile Exchange."

"-US soybean futures fall to a 13-month low as uncertainty surrounding the global economy encouraged traders to reduce risk exposure. Broad-based asset selling and a rising dollar was at the center of risk-off moves. Otherwise traders took a cautious approach ahead Thanksgiving. CBOT January soy ended down 30 1/2c at $11.22 1/2 a bushel. Soy product futures slump in unison with soybeans, joining a broad-based sell-off across asset classes. Worries about the global economy enticed traders into shedding risk, with analysts also worried about potential demand destruction in an economic slowdown, particularly in China, analysts say. CBOT Dec soymeal ended down $9.50 at $282.50/short ton; Dec soyoil dropped 1.46c to 49.32c/lb."

 FKLI- Third Session Consecutive Correction

 Stock index fell about 4.82 points to settle lower at 1,433.17 yesterday with slower volume and lower market value transacted yesterday. Investors were still cautious about the ability of government officials and international financial bodies such as IMF to help Greece and other financial troubled European countries find some measures to rectified their debt issues. Recently, China manufacturing survey data turn to be slow than expected. With these negative news flowing around, market will have difficulties to rally. That was the external picture, back to our local market, the index futures refuse to gain even after it showed some sign to recover on previous Tuesday. Technically, there was no sell-off nor it occur any aggressive down side momentum yesterday as the Nov contract did not fell more than previous low (which was last line of support area for the moment) around 1,407 level. For today, we are likely to see some recovery for the Nov contract provide if there is no sell-off that breach below 1,407 level. Unfortunately if this event does occur, we are likely expecting the index futures to be traded with huge discount (at least 10 points) against the cash composite.   

Daily Pivot Point
R2= 1432
R1= 1425
S1= 1410
S2= 1401

 FCPO- Correcting For The Third Session

 CPO futures remain to edges down, paving its way for more correction yesterday amid weaker than expected soya oil futures. Most traders are concern over the overall performance on Soya oil as it dropped quite substantially this week. The most active traded Soya oil futures was last seen traded lower about 0.99 cents or 1.97% to 49.79 cents during Asia trading hours, 6.00pm +8GMT. Fortunately, the losses on CPO futures across the months were somehow manageable as there was no aggressive sell-off. At close, the benchmark Feb fell about RM14 to close at 3,168, the low of the day was 3,128. Fundamental outlook remain the same, damp weather condition is likely provide support for price to fall steeply. Furthermore, a developing La Nina weather event may mean heavier rainfall over the next few weeks in key palm oil growing areas of peninsular Malaysia, leading to harvesting delays and a disruption in transportation of the oil from mills to refineries and ports. Technically, there was no clear winner for Sellers and Buyers yesterday, as the closing candle pattern for daily time frame chart appears to be a Doji. Time will tell how well palm oil futures would recuperate when it the second support trend line which is located around 3,100 (weekly support  level). For today, pivot support is located around 3,131 while resistance is pegged around 3,187.

Daily Pivot Point
R2= 3213
R1= 3187
S1= 3131
S2= 3101


Disclaimer: Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.