Quantitative Analysis - KLCI surprisingly opening at -5 points!!! Not a good sentiment :(

KLCI surprisingly opening at -5 points. Selling pressure increased from foreigner. Estimate close below 1790.

M & A Securities head of research Rosnani Rasul in a market preview Wednesday said Wall Street took a breather despite the robust housing starts and home index following steady gains since the last few weeks.

She said the US quantitative easing case for tapering is getting more certain by the day driven by the steady improvement in economics barometer.

Rosnani said she was of the view the tapering would kick-start in 1Q14 on a steady hair cut of USD5 billion of monthly bond buying programs.

She said the US quantitative easing was likely to be stopped by the 2H of next year, adding that nonetheless, on the adverse, the global equity market would be able to absorb this as that would mean that the US economy is finally up and running again.

“In the meantime, however, it will have to endure a knee jerk reaction following the rapid capital outflow movement that will hammer certain currencies along the way.

“In view of that, we continue to advocate a profit taking strategy until the market normalises in the late 1H14,” she said.


Meanwhile, Alliance IB Research in a note Nov 26 said that there were buying attempts to carry the market higher on Tuesday but, the momentum fizzled out as many market participants lacked convincing evidence to be on an aggressive buying side.

“This resulted in a formation of an inside day pattern which indicated indecisive market play,” it said.

Elsewhere, Asian share markets got off to a stuttering start on Wednesday following an uninspiring performance by Wall Street, while a dip in the dollar against the yen could prompt profit-taking on Japanese stocks into month-end, according to Reuters