Choppy trading ahead for M'sian stocks amid unresolved eurozone debt crisis

PETALING JAYA: The local bourse's benchmark index closed higher but
it may find the going tough for the rest of the week as investors look
for more clarity from eurozone policymakers on the sovereign debt
crisis.
Analysts said there would be choppy trading for equity
markets around the world this week as leading economic indicators
continued to show weakness in demand amid a slowdown in growth in the
months ahead.
Maybank Investment Bank Bhd
senior technical analyst Lee Cheng Hooi said in a report that although
the tone of the global indices had improved somewhat, eurozone worries
persisted.
“There could still be inherent and great price
volatility in the next two weeks before the global markets wind down for
the Christmas and New Year holidays in late December,” he added.
Hong Leong Investment Bank Bhd
research head Low Yee Huap said downside consolidation risks remained
amid worsening indicators unless fresh buying emerged or in anticipation
of the year-end window-dressing activities.
“Weekly supports are
1,430 to 1,447 while resistance levels are 1,471 to 1,500,” he said,
adding that uncertainty still persisted as to whether Europe had
constructed firewalls strong enough to prevent further bond market
sell-offs.
The FBM KLCI was up a half-percent to 1,467.10 at the close yesterday following interest in select stocks with consumer counters such as Guinness Anchor Bhd, Dutch Lady Milk Industries Bhd, Nestle (M) Bhd and Fraser & Neave Holdings Bhd among the gainers.
Interest in Proton was renewed following a statement from the national automaker's adviser Tun Dr Mahathir Mohamad who said that Khazanah Nasional would be selling its 42.74% stake to DRB-HICOM with a general offer likely to be made.
Hwang DBS Vickers Research
technical analyst Goh Yin Foo said with only three more weeks to go
before the year-end, trading could swing sideways, possibly bouncing
back and forth between 1,445 and 1,475 levels.
“Since no clear
cut solution to address Europe's sovereign debt problems had surfaced at
the summit last week, investors would be pinning their hopes next on
the US Federal Reserve.
“With the near-zero federal funds rate
likely to be kept, its Federal Open Market Committee might be expected
to take action (or at least promise to step in if necessary) to restore
confidence at a scheduled meeting this Tuesday,” Goh pointed out.