Sunday, March 11, 2012

Market Overview 12th March 2012

 Monday, 12th March 2012. The FBM KLCI closed unchanged on previous Friday despite stronger performance on regional index and U.S market. Other news to follow.

"-U.S. stocks rose for a third session Friday, with the S&P 500 and Nasdaq tallying a fourth week of gains, after another strong monthly jobs report illustrated the recovery continues. Off 0.4% from last Friday’s close, the Dow Jones Industrial Average DJIA +0.11%   settled with a second weekly drop. The Dow rose 14.08 points, or 0.1%, to 12,922.02, with two-thirds of its 30 components gaining ground. Up for a fourth consecutive week, the S&P 500 SPX +0.36%   climbed 4.96 points, or 0.4%, to 1,370.87, giving it a weekly rise of just under 0.1%. Also pulling into positive terrain for a fourth straight week, the Nasdaq Composite COMP +0.60%  gained 17.92 points, or 0.6%, to 2,988.34."

"-Japanese stocks drove a rally in Asian markets for a second straight day Friday, with exporters leading the charge against the backdrop of the yen’s recent losses, a decline in Chinese inflation and optimism over Greece’s debt restructuring. The Nikkei Stock Average JP:NIK +1.65% , which jumped 2% on the previous day, rose another 1.7% to finish the day at 9,929.74, its highest close since Aug. 1. Earlier in the day, the benchmark had briefly topped 10,000, also for the first time since Aug. 1. Elsewhere in the region, Hong Kong’s Hang Seng Index HK:HSI +0.89% rose 0.9% to 21,086, Australia’s S&P/ASX 200 index AU:XJO +0.98% gained 1% to 4,212, South Korea’s Kospi KR:0100 +0.88%  advanced 0.9% to 2,018.30 and Taiwan’s Taiex climbed 0.4% to 8,016.01.China’s Shanghai Composite CN:000001 +0.79%  advanced 0.8% to 2,439.46, after data showing the February consumer price index rose 3.2%, substantially softening from a 4.5% reading in January."

"-Crude-oil futures ended higher Friday, notching a weekly gain as better-than-expected data on U.S. employment in February lifted prospects for oil demand. Traders also eyed developments in the Middle East following an Israeli air strike on Gaza, and digested inflation data from China that indicated the country may take measures to stimulate its economy. Crude-oil futures for April delivery CLJ2 +0.79%  rose 82 cents, or 0.8%, to end at $107.40 a barrel on the New York Mercantile Exchange. That was oil’s third session of gains."

"-US soybean futures end lower, retreat from early gains as traders take profits. The rally in soybean futures that pushed prices to 6-month highs stalled Friday as forecasters predicted high prices will slow global demand and boost the size of the crop US farmers plant, analysts say. Despite USDA cutting South American production more than expected, traders were focused on how USDA forecasters predicted rising prices will cool global export demand. Traders also voiced concern that further cuts to Latin American will be limited, as forecasters should have a good handle on crops at this point. CBOT May soy ended down 3/4c at $13.37 3/4/bushel, after climbing to $13.55 1/2 overnight. Soy product futures end mixed, with the unwinding of soymeal/soyoil spreads featured. The spread of buying soymeal versus soyoil had propelled meal to 5-month highs, but without a new fundamental spark, traders looked to take profits. There was a large spread position unwound in the market, says Mike Zuzolo, president Global Commodity Analytics and Consulting. CBOT May soymeal dropped $4.50 to $362.70/short ton, and May soyoil climbed 0.88c to 54.27 cents/lb. "


 FKLI- Uptrend, Still Good

Stock index ended the week lower as investors are pausing from accumulating further position in the equity market while awaiting better news or hint to Long again. For next week, we should be expecting some positive background for external market news as there were indicative progress in resolving the Greek debt crisis, as well as a sharp slowdown in consumer price growth in China. According to banking sources, private investors have agreed to swap about 85% of their Greek government bonds for new securities in the biggest sovereign debt restructuring in history -Bloomberg. This development should reduce the stress on European financial system momentarily. Back to our market, this will be the first week both of stock index and derivative ended weaker. Market is likely taking some breather momentarily after rising extensively since Oct last year. Hence, it would NOT be a surprising sight if the index futures does dropped below the white support trend if there is some substantial correction from here. But that alone does not wipe out current uptrend that has been formed about five months, in other words it takes more than a few corrections to reverse into a Bearish trending market.  For today, support is located around 1,571 while resistance is pegged at 1,587.

Daily Pivot Point
R2=1587
R1= 1582
S1= 1574
S2= 1571

FCPO-Rose To At Least 9-Months On Previous Friday. 
CPO futures rose to the highest level in nine months on previous Friday, supported by promising recovery by Soya oil and upbeat price forecasts for the edible oil from analysts at 2012 palm oil conference. At close, the benchmark May went up about RM52 to 3,355, the high for the day was 3,368 level. Mean while, the most active traded month for Soya oil also surge 1.01 cents to 54.40 cents per pound during Asia trading session on Friday, 6.18PM +8GMT. Technically, positive momentum are currently running on palm oil futures as investors are expecting improved demand and tighter supplies for the upcoming palm oil fundamental full report that will be announce on Monday 11th March 2012. Independent cargo surveyor Intertek reported that Malaysia March 1-10 Palm Oil Exports 444,259 Tons, rose 30% from previous month same period. Technically, palm oil futures preceding upside has been quickly restore when the market starting to surge last week. Nonetheless, this upside is not a smooth ride after all as market does retrace to 3,220 level before it stop and recover again. With stronger technical formation for further price hike plus positive sentiment such as hints on slowing productions in Indonesia and recent palm oil demand recovery, palm oil prices are likely trending up.
P/S: Leading analyst Dorab Mistry forecast palm oil would hit 4,000 ringgit by the end of June, due to demand from India and stocking by Muslim countries.
Daily Pivot Point
R2= 3395
R1= 3375
S1= 3327
S2=3299
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.

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