FBMKLCI today is strongly moving upwards following all our regional market. All this massive buying support from the investors came into the market after news on European debt deal looking better ahead.
Our local bourse will be test near term resistance at 1,500 points with the support at 1,460 points. I'm also positively looking ahead this uptrend would be continue for the next few days or may be next few weeks. Recap on the previous 2 months (August & September) and early October, US debt crisis came along with the European debt crisis was broke all the rising trend of world market. However, with the European nations making steady progress towards resolving the sovereign debts problem and the surprisingly positive economic data coming out from the U.S, there come to be a main reason why the market soar.
On the news side, these might be a good reasons why the bull is charging :
1. The EU Rescue Package provides near term stability for the financial sector, lifting risk appetite and the euro
2. Greek Haircut of 50% reduces the losses that banks need to absorb, which is positive for stocks and risk
3. European Banks will need to repatriate funds to meet new capital requirements, which could mean more demand for euros
4. ISDA confirmed that the PSI will not trigger a credit event on Greek debt, which is positive for risk
5. Traders were short euros going into the EU Summit and now that a deal has been reached, it has triggered a wave of short covering.