Market Overview 26th Jan 2012

 Thursday, 26th Jan. The FBM KLCI ended slightly lower yesterday with some selling pressure occur on selective blue chip's stocks. Other news to follow.

"-U.S. stocks gained Wednesday, with the Dow industrials erasing losses to end at an eight-month high after the Federal Reserve said interest rates would remain low through late 2014. After falling as much as 95.63 points, the Dow Jones Industrial Average DJIA +0.64%   ended at 12,756.96, up 81.21 points, or 0.6%. It was the index’s highest close since May 10. The S&P 500 Index SPX +0.87%   gained 11.41 points, or 0.9%, to 1,326.06, with utilities leading gains that included all of its 10 industry groups.

The index has closed lower only three sessions so far this year. Up for a second session, the Nasdaq Composite COMP +1.14%   rose 31.67 points, or 1.1%, to 2,818.31."

"-Asian markets advanced Wednesday on robust earnings from Apple Inc. and better-than-expected euro-zone economic data, with stocks in Tokyo ending near a three-month high as the yen weakened on Japan’s first annual trade deficit in 31 years. Australia’s S&P/ASX 200 index AU:XJO +1.12%  rose 1.1% to 4,271.30, with banks leading the advance after a tame reading on consumer prices, while South Korean investors returned after a four-day holiday weekend to push the Kospi KR:0100 +0.12%  0.1% higher to 1,952.23. In Tokyo, the Nikkei Stock Average JP:100000018 +1.12%  climbed 1.1% to 8,883.69, a closing level it hasn’t seen since Oct. 31."

"-Crude-oil futures closed higher Wednesday, but below $100 a barrel, after the Federal Reserve said it planned to keep interest rates low until at least 2014, extending its earlier target and fueling demand for so-called riskier assets as the dollar weakened. Crude for March delivery CL2H +0.31%  climbed by 45 cents, or 0.5%, to $99.40 a barrel on the New York Mercantile Exchange, off the session’s high of $100.40.


"-US soybean futures stumble, shunning the price influence of higher grain futures. Improved conditions for South American crops with yield enhancing rains moving through Argentina and southern Brazil expected to boost production potential weighed on prices, analysts say. Higher grain prices did lend support to soybeans, but unlike Tuesday, the absence of any other supportive news failed to generate buying. Traders say added pressure was from corn/soy spreading. CBOT March soy down 6 1/2c at $12.13 1/2. Soy-product futures end mixed, with soymeal backpedaling in step with the decline in soybeans as improved crop conditions in South America encouraged traders to reduce risk premium. But soyoil edged higher, benefiting from a rebound in crude oil and profit-taking on meal/oil spreads. CBOT March soymeal dropped $2.40 to $321.10/short ton and March soyoil rose 0.04c to 51.30c/pound. "

FKLI- Still Looking Good For Another Recovery 

Most major indices managed to leap higher during our Chinese New Year holiday for two days this week. Various better than expected earning results in U.S equities market have been reported this week thus further positive momentum is expected to last with some minor correction along the way. Asia regional equity market might have different direction as there are signs of economy slow down on China and Japan as well. As for our local market, things may not look that Bearish as we still could look forward for some pre-general election rallies that have been the main headlines and rumors that it could happen anytime within the second quarter this year (maybe). Technically, there is a small progression occur on the index futures yesterday when the market open slightly above the weekly range for a brief period of time. Yesterday, the Jan contract open higher at 1,530.50 level and rose up to 1,536.50 before settling 3.50 points higher to 1,528.50 on the closing bell. It is still early to tell whether we are going to see more positive momentum this week judging on lower volume and open interest recorded for yesterday session. Slow or lower market participation is bad for any break out, as it is likely indicate less follow thru Buying activities when the index move to higher ground again, say above 1,530 level. Nonetheless, overall market sentiment is still positive at the moment judging from yesterday new weekly high at 1,536.50 level.

Daily Pivot Point
R2= 1542
R1= 1535
S1=1522
S2=1516.5

FCPO-  Traded Higher As Soya Oil Rebound.

CPO futures ended slightly higher yesterday but it is not enough to shrug off investor's weak sentiment over lower export figures reported by cargo surveyors recently. At close, the benchmark Apr closed RM4 higher to 3,169, just 7 points off the low for the day. Commodities prices around the world is likely to stay volatile throughout the first quarter this year based on weather uncertainties, demand concerns and gloomy economy conditions. If we take a hard look on the palm oil futures trend on higher time frame (i.e: daily), it is trending positively with some healthy corrections along the way. If not for the sharp decline on export figures and steep correction happened with Soya Oil last week, instead of falling down to 3,100 level palm oil  futures could have continue to rallies after it hover within the 3,247~3,165 range for few sessions on previous two weeks. Technically, market is still positive with noticeable higher high and higher lows formation shown on hourly chart above. Unfortunately, upside is limited due to low market participants this week as there might be less fresh Buying activities if the market recover further. For today, immediate support is located around 3,157 while resistance is pegged at 3,201.

Daily Pivot Point
R2= 3201
R1= 3185
S1= 3157
S2= 3145

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.