Midday Market Profit taking caps KLCI advance

Midday Market Profit taking caps KLCI advance
Business & Markets 2013
Written by Chong Jin Hun of theedgemalaysia.com
Thursday, 28 March 2013 12:47


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KUALA LUMPUR (Mar 28): The FBM KLCI gave up a portion of its gains on profit taking after rising as much 0.5% on foreign demand for Malaysian equities.

This came amid cautious sentiment ahead of the country's general election. At 12.30pm, the KLCI rose 3.02 points or 0.2% to 1,670.59, helped mainly by MALAYAN BANKING BHD [] and Genting Malaysia Bhd.

The KLCI had earlier climbed as much as eight points to 1,675.54 at 9.15am before paring gains.

Across Bursa Malaysia, about 437 million shares worth some RM826 million changed hands. There were 268 gainers versus 273 decliners.

The top gainer was METROD (M) BHD [] while UMW HOLDINGS BHD [] led decliners. The most-active counter was COMPUGATES HOLDINGS BHD [].

Hong Leong Investment Bank Bhd research head Low Yee Huap wrote in a note that "a stronger rebound is underway" for the KLCI on positive technical cues following its gains in recent days.

The technical signals have prompted expectations that the benchmark may test higher levels of 1,692 followed by the all-time high of 1,700.

But the substantial gains of over 40-points in the 30-stock index so far this week have also triggered expectation of a correction, according to analysts. This is in anticipation that investors will lock in profits ahead of the country's election.

Dynamics of the domestic market may have taken the cue from the dissolution of the Negeri Sembilan State Legislative Assembly today to make way for the election.

Investors are waiting for the Malaysian Prime Minister to announce the dissolution of Parliament. The election must be held by end-April and many cautious and risk-averse investors have scaled down their holdings in the local market.

Asia markets fell at noon. Japan’s Nikkei 225 declined 1.39%, Hong Kong's Hang Seng dropped 1.11% while Singapore's Straits Times was down 0.14%.

Reuters reported that Asian shares fell and the euro remained under pressure on Thursday as weak euro zone data, a sluggish debt auction in Italy and fears of a potential run on Cyprus's banks stoked investors' concerns about instability in Europe.

Adding to the negative tone was the latest restrictive move by China, with its banking watchdog ordering banks to strengthen checks on the underlying assets of a range of wealth management products to ward off potential risks to the financial system.

going to spring up from daily triangle ...VROOOOM