KUALA LUMPUR (July 8): The FBM KLCI is expected to consolidate today further amid cautious sentiment and a lack of fresh catalysts at the local market.
Copper and other metals plunged on Tuesday as the euro sank to a five-week low against the dollar after the European Central Bank tightened lending conditions for Greek banks and as the collapse in equities prices in China drove fears about the country's economy, according to Reuters.
U.S. stocks ended higher, taking heart from a stabilization in oil prices, while a global stock index fell as European shares extended losses on worries about Greece's ability to secure fresh aid, it said,
M & A Securities Research head Rosnani Rasul in a market preview today said Wall Street recovered some points on Tuesday, lifted by technical rebound and also IMF suggestion to the US Federal Reserve on its policy outlook.
She said the S&P 500 and DJIA gained 12.58 (0.61%) and 93.33 (0.53%) points to end at 2,081.34 and 17,776.91 respectively.
Rosnani said that Wall Street had picked up beaten down share price amid IMF suggestion for the Fed to delay hiking its policy rate into 2016.
She said this was a welcome development as there is seemingly no pressing factor that could justify the Fed to adjust its policy rate in 2H15 given uneven economic growth, still recovering housing market, tepid inflation and above all the brewing storm in Eurozone.
“While we don’t expect the Fed to make an outright acceptance over this but they may consider this by delaying the hike well into late 2H15, i.e. December 2015.
“At the moment it is too soon to call the shots as 2H15 had just begun,” she said.
As for Greece, Rosnani said there was no damaging news just yet at the back of the European Union upcoming meeting on Sunday to discuss on Greece.
“Note that the clock is ticking for Greece to meet its sizeable payment to IMF this July 20.
“Greece banks will be opened on Thursday following bank holiday since last week and we expect bank run to take place.
“At the moment, although some quarters may pick up beaten down share price but we expect cautious mode to take center stage.
“Hence, big bets may not take place just yet,” she said.