Brace for more selling pressures today

Brace for more selling pressures today. While Wall Street was closed for a holiday last night, the futures market has given a warning of further downsides ahead. The Sep futures contract for the bellwether DJIA slumped to hover at a 300-point discount to the spot rate at 8 o’clock this morning.

The bearish external sentiment – clouded by persisting concerns on the European sovereign debt crisis – could open the way for the key FBM KLCI to drop deeper. The benchmark index is expected to back off from its support-turned-resistance level of 1,465 to the next support line of 1,435 ahead.

With capital preservation a top priority these days, most investors may only be interested in stocks that offer visible returns, such as DXN Holdings, which has received a conditional takeover offer to acquire its shares in cash at RM1.75 per share (versus its last traded price of RM1.42).