The  FBM  KLCI  saw  no  lights  of  respite as  it  stayed  within  the  red  zone throughout  the  entire  trading  session. Also, there was no escape for other subindices  as  the  downbeat  market sentiment  splashed the  broader market, lower liners included, all in red in tandem with the weak global market sentiments. At  the  same  time,  market  participants flocked to profit taking activities ahead of Budget 2015 that is set to be announced on Friday.

Meanwhile, market breadth was severely negative as losers  crushed  gainers on a ratio  of  10-to-1  stocks.  Traded  volumes also  jumped  as  the  profit  taking escalated,  rising  17.9%  to  2.58  bln shares.

This  time  around,  KLK  (-36.0  sen)  led the  index  heavyweight  decliners,  while other  significant  losers  include  O&G giants  such  as  Petronas Gas (-18.0 sen) and  Sapura  Kencana  (-8.0  sen),  which extended  their  losses  on  lower  crude  oil prices.  Elsewhere,  several  other  O&G related  companies  also  fell  with  Uzma and  Coastal  slipping  22.0  sen  and  20.0 sen  respectively,  while  Yinson  declined 16.0  sen.  Meanwhile,  Asia  File  Corp. gapped  down  to  end  33.0  sen  lower, attributable to the  weaker  overall  market sentiment.

Major  gainers  on  the  broader  market include  Omesti  (+6.0  sen),  SMPC  (+9.0 sen),  PLS  (+9.0  sen)  and  Utusan  (+5.0 sen).  Kotra  rose  8.0  sen  to  recoup  its previous  day’s  minor losses.  There were only  five  advancers  on  the  FBM  KLCI, which were  Genting Malaysia (+4.0 sen), KLCC  (+7.0  sen)  and  MISC  (+2.0  sen), RHB  Capital  (+3.0  sen)  and  PPB  (+2.0 sen).

Following  the  cut  in  global  growth forecasts  from  the  IMF,  the  Hang  Seng Index  snapped  its  three  consecutive days  of  gains  to  end  0.7%  lower.  The Nikkei  also  fell  to  hit  a  five-week  low, partly  due  to  a  stronger  Yen.  After  a week-long  national  holiday,  the Shanghai  Composite  resumed  trading and managed to buck  the  dour  trend  by registering  a  gain  of  0.8%.  Meanwhile, ASEAN markets ended mixed.

U.S. stockmarkets recorded one of their biggest one -day gain fof the year as the Federal  Reserve  reaffirmed  its  intent  to be prudent in  raising interest rates. The Dow  jumped  by  274.84  pts  or  1.6%  to close  near  the  17,000  mark,  while  the S&P  500  and  Nasdaq  rose  1.8%  and 1.9%  respectively.  Alcoa  Inc.  rallied 2.0% in late trading, following the betterthan-expected earnings results.

As  the  Ebola  virus  fear  permeates throughout  the  European  region,  the FTSE  was  again  dragged  lower  by travel-related companies such as easyjet PLC.  Other  decliners  include  Rio  Tinto Plc and Glencore Plc as both companies brushed  off  any  potential  merger  talks. The  DAX  slid  1.0%  on  a  much  largerthan-expected  drop  in  Germany’s industrial  production,  while  the  CAC  40 slumped 1.0% as well.

THE DAY AHEAD

Stocks  on  Bursa  Malaysia  has  endured a volatile ride over the past few sessions and  the  gyrations  are  set  to  continue over  the  near  term  until  the  global markets find stability. For the near term, however,  we  expect  Bursa  Malaysia stocks to post a slight rebound, following the  lead  of  the  recovering  overseas stock indices. The rebound will be slight as  investors  are  still  wary  and  bargain hunting  activities  will  be  light,  in  our view.

In addition, investors are likely to stay on the  sidelines  ahead  of  the  upcoming Budget  announcement  on  Friday  for  a clearer economic direction.

Meanwhile,  we  also  expect  bargain hunting  activities  to  be  light  among  the lower liners  as we expect retail investors to  be  cautious  after  the  recent  steep falls.

Source: M+ Online Research - 9 Oct 2014