Italy Crisis Piles on More Pressure as KLCI falls 30pts

Blue chips came under selling pressure early Wednesday as foreign funds continued to sell down their shareholdings, with the recent political crisis in Italy casting more gloom.

At 9.11am, the KLCI was down 29.54 points or 1.66% to 1,746.30. Turnover was 243.44 million shares valued at RM195.64mil. Decliners thumped gainers 406 to 64 while 167 counters unchanged.

Asian shares extended a global sell-off in early trading Wednesday as Italy’s political crisis provoked a heavy retreat on Wall Street, sent the euro to a 10-month low and pushed up borrowing costs for the government in Rome, Reuters reported.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1.1%, while Japan’s Nikkei average shed 1.7% to hit a six-week low. South Korea’s KOSPI and the Australian stock benchmark slipped 1.6% and 0.7%, respectively.

Investors fear that repeat elections – which now seem likely in the euro zone’s third-largest economy as soon as July – may become a de-facto referendum on Italian membership of the currency bloc and the country’s role in the European Union, Reuters reported.

At Bursa, Nestle fell 80 sen to RM146.20, BAT 48 sen to RM31.30 while F&N lost 38 sen to RM36.88 and Carlsberg lost 36 sen to RM20.42.

Tenaga fell 48 sen to RM14.30, Hong Leong Bank and Public Bank 44 sen lower to RM18.50 and RM24.46.

Muda tumbled 54 sen to RM2.28 and Hengyuan 39 sen to RM6.37.

Kenanga Research said overall, the technical outlook of KLCI appears outright bearish following its Monday’s close which saw the index breaking below its 1,780 level.

“The bearish outlook is also supported by the formation of a ‘Death Cross’ between key SMAs with the MACD continuing its strong downtrend.

“From here, we expect lower supports of 1,750 (S1) and 1,700 (S2) to hold its place for now, and thus, would advocate a buy on dips. Conversely, immediate resistances can be found at 1,780 (R1) and 1,800 (R2),” it said.

Courtesy : thestar.com
Photo : Daily Express

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