Capital preservation will be the priority of most investors for now

After recovering from a low of 1,476.24 to close at 1,496.99 yesterday (which represents a 27.4-point decline), the key FBM KLCI is expected to plunge deeper on persisting selling activities today. Technically speaking, the benchmark index may fall towards the next support level of 1,465 ahead.

Essentially, investors will be more inclined to sell rather than buy equities following Wall Street’s extended freefall. Major U.S. stock bellwether tumbled further last night (down between 5.5% and 6.9% at the closing bell) in the aftermath of S&P’s downgrade of the U.S. sovereign credit rating. And more downside could be in store when trading resumes today, as the Dow Jones Industrial Average futures contract was hovering at a 157-point discount to the spot rate this morning. Given the prevailing jittery market mood, it seems too early to bottom fish at this juncture.

Capital preservation will be the priority of most investors for now.

From HWangDBS