KLCI dropped 19.39 points to touch 871.28 as at 12.00 noon today (see Chart 1 below). The selldown is likely to be a reaction to the poor financial results for many companies during the reporting season just ended as well as further weakness in the Ringgit (see Chart 2 below). The latter is likely the result of the contagion effect from the on-going selldown of currencies of the Emerging Markets of Eastern Europe.
Chart 1: KLCI's intra-day chart as at March 2, 2009 [12.00 noon] (source: Quickcharts)
Chart 2: USDMYR's weekly chart up to Feb 27, 2009 (from Yahoo Finance,
here)
The current selldown of the KLCI is likely to lead to a re-test of the October low of 801. It is very crucial that the KLCI must not go below this level.
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