Monday, May 7, 2012

Market Overview 8th May 2012

Tuesday, 8th May 2012. The FBM KLCI went down due to overnight weakness on U.S job data, most of the regional stock indexes also traded significantly lower yesterday. Other news to follow.

"- U.S. stocks ended with a blue-chip loss and modest gains for broader benchmarks, as investors reflected on voting results over the weekend in which Greece and France rejected pro-austerity candidates. The Dow Jones Industrial AverageDJIA -0.23%  lost 29.74 points, or 0.2%, at 13,008.53, with 17 of its 30 components falling. The S&P 500 Index SPX +0.04%   added 0.48 points, or 0.04%, to 1,369.58. Financials fared the best and technology the worst among its 10 industry groups, which were split between winners and losers. The Nasdaq Composite Index COMP +0.05%  gained 1.42 points, or 0.1%, to 2,957.76. 

"- Asian shares tumbled Monday as investors reacted to data that raised fresh fears about the health of the U.S. economy and European elections that added to jitters about the euro zone’s future.  In Tokyo, which had been closed since Wednesday, Japan’s Nikkei Stock AverageJP:100000018 -2.78% plunged 2.8%. Hong Kong’s Hang Sang IndexHK:HSI -2.61%  fell 2.6%, although the Shanghai Composite IndexCN:000001 -0.0027%  finished fractionally lower. Australia’s S&P/ASX 200 indexAU:XJO -2.15%  dropped 2.2%, while South Korea’s Kospi KR:SEU -1.64%  fell 1.6%."

"-July Soybeans finished down 12 1/2 at 1465 3/4, 13 off the high and 5 1/2 up from the low. November Soybeans closed down 13 1/4 at 1353 1/2. This was 3 1/2 up from the low and 14 1/2 off the high. July Soybean Oil finished down 0.07 at 53.58, 0.19 off the high and 0.32 up from the low. July soybeans closed moderately lower on the session and up a bit from the early lows but old crop soybeans did not recover as much as wheat and corn did late in the session. A bearish tone to outside market forces plus a continued favorable weather outlook helped to spark the early selling pressures. However, even when outside market forces turned less negative, (set-back in the US dollar and a recovery in equity markets), July soybeans pushed to a new low for the session into the mid-day. News that the fund traders and combined speculator net long positions in the COT report as of May 1st showed a record high net long position helped to keep the tone bearish on thoughts that the market remains overbought. Traders see soybean plantings as of Sunday near 22% complete as compared with 12% last week. Private exporters reported the sale of 110,000 tonnes of US soybeans to unknown destination for the 2011/12 season. Weekly export inspections came in at 9.99 million bushels which was well under trade expectations near 15 million and this compares with 11 million necessary each week to reach the USDA projection. Canola stocks in Canada on March 31st fell to a 7-year low at 4.3 million tonnes which was at the low end of expectations and compares with 6.2 million tonnes last year. For ending stocks for the 2011/12 season, traders see stocks near 215 million bushels as compared with 250 million posted in the April update. For the 2012/13 season, traders see ending stocks near 165 million bushels but with a range of near 90 to as high as 250 million bushels.
FKLI- Braced For Temporary Correction

Market is spooked again by the sudden weakness over U.S economy growth. Recent job data on U.S reveal the recovery path is filled with doubt but maybe not an extend that will cause recession. The weak U.S stock index performance have caused tremendous ripple to other major market as well. Yesterday, the Bursa Derivative FKLI May contract finished 5 points lower to 1,578 after it went down to 1,570 level on morning session. Meanwhile, the FBM KLCI dipped about 6.17 points to 1,584.87 level. External sentiment are now begin to diverge into negative course as there were renewed concerns about the euro-zone's sovereign debt crisis after Socialist party candidate Francois Hollande won France's presidential election. The Greece's debt worries might get worse as Hollande had promised to push for more growth and less austerity for the French economy. Technically, chances recovery for the May contract still remain positive as it manage to recover in the afternoon session. From hourly chart, this recovery is likely form another high lows, signifying positive progress for further recovery. For today, support is likely located around 1,572 while resistance is pegged at 1,584.

Daily Pivot Point
R2= 1584
R1= 1581
S1= 1572
S2= 1567

FCPO -Recovered In Late Afternoon Session.

It was a tough day for CPO futures when the local commodities market is being cornered with significant weakness on Soya oil recently. According to seasonal demand pattern and weather cycle, palm oil prices are likely to stay on negative note in the beginning of second quarters. On closed, CPO futures for July contract ended RM2 higher to 3,365 despite some serious sell-off on Soya oil futures since last week. The benchmark July manage to finished just 5 points lower than the high of the day. Technically, the benchmark July Bearish formation is still yet set-off as yesterday afternoon session recovery is likely turn out to be a temporary recovery or last minute bargain hunting that disallow the market to fall steeper. Nonetheless, market is poised to recover further if overnight Soy oil futures manage to closed positively. With lower highs and lower lows formed on hourly chart shown above, market is still many miles away to turn this medium term Bearish mode to Bullish outlook. For today, support is located around 3,325 while resistance is pegged at 3,379 followed by 3,399~3,400.

Daily Pivot Point
R2= 3399
R1= 3379
S1= 3325
S2= 3291
 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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