Wall Street last night, causing a collapse of between 4.3% and 5.1%

Mayday! Mayday! The bears ran wild on Wall Street last night, causing a collapse of between 4.3% and 5.1% in key equity indices amid mounting concerns that the global economic recovery might stall.

This will inevitably trigger a sell-off across Asia equities today. The benchmark FBM KLCI on our Malaysian bourse will not be spared too, likely to drop below the immediate support level of 1,530 ahead. In terms of corporate developments, Atis should buck the falling market trend, as the company has proposed a selective capital reduction and repayment exercise to make a cash return of RM1.30 per share to entitled shareholders. Separately, Affin shares are expected to come under focus too after it called off its acquisition plan to acquire an Indonesian bank.

Wall Street went on a rollercoaster ride last night

Wall Street went on a rollercoaster ride last night. Key U.S. equity indices were down 1.4%-1.8% at their intra-day lows before staging a subsequent rebound to finish in positive territory (up between 0.3% and 0.9% at the closing bell) as some investors speculated that the Federal Reserve could implement fresh stimulus measures to boost the economy.

As a response, sentiment across Asia today will likely remain nervous following the volatile overnight performance of Wall Street. Back home, the benchmark FBM KLCI could struggle to break past its immediate resistance barrier of 1,550 ahead. With the economy being the main subject widely talked about currently, investors will be eager to check out Malaysia’s external
trade statistics for Jun.

One media survey has projected an annual rise of 6.1% for exports and 2.5% for imports, translating to a monthly trade surplus of RM7.7b. On the corporate front, recently listed Prestariang shares may see added trading interest today after it has signed an agreement with Prometric to develop a testing and certification program for English for its customers.

FBM KLCI may see a marginal downward bias

Asian equities could give back parts of their gains made yesterday due to an absence of follow-through buying activity today. This comes as key stock indices on Wall Street fell between 0.1% and 0.4% last night as investors reacted negatively to weak manufacturing data, which overshadowed an imminent legislative approval for a higher federal debt ceiling.

Back home, the benchmark FBM KLCI may see a marginal downward bias too, possibly attempting to find a stable footing above the resistance-turned-support line of 1,550.
Meanwhile, there is not much corporate news for investors to chew on today. One local business daily reported that a consortium comprising the controlling shareholders of Genting Group, Hong Leong Group and Lion Group has signed an agreement to acquire Tanjong’s numbers forecasting operation for RM2.1b. Separately, Pulai Springs has received a conditional takeover offer from its substantial shareholder to purchase the remaining shares at RM1.18 per share in cash (versus its last done price of RM0.90).

Report from HWangDBS