Sigh of relief as US lawmakers reach deal on debt

USA debt is really give impact for the world market

KUALA LUMPUR,Monday, 01 August 2011: Regional markets mostly opened higher on Monday, August after US Republican leaders and the White House announced they had brokered a deal to raise the country's US$14.3 trillion borrowing ceiling by Tuesday's deadline and avoid default on obligations.
President Barack Obama announced on Sunday a last-minute deal to raise the US borrowing limit and avoid default.
“There are still some very important votes to be taken by members of Congress, but I want to announce that the leaders of both parties, in both chambers, have reached an agreement that will reduce the deficit and avoid default -- a default that would have had a devastating effect on our economy,” he said.
Asian markets, relieved over the deal, mostly advanced with Japan’s Nikkei crossing the 10,000-point mark.
On Bursa Malaysia, the FBM KLCI rose 7.80 point to 1,556.61 at 10am. Gainers led losers by 319 to 98, while 174 counters traded unchanged. Volume was 185.10 million shares valued at RM168.47 million.
At the regional markets, Japan’s Nikkei 225 rose 1.84% to 1,013.90, Hong Kong’s Hang Seng Index added 1.54% to 22,785.07, South Korea’s Kospi gained 1.84% to 2,172.44, Singapore’s Straits Times Index rose 0.7% to 3,213.76 while Hong Kong’s Hang Seng Index edged up 0.46% to 8,683.81.
Meanwhile, the Shanghai Composite Index shed 0.37% to 2,691.86.
OSK Research’s Chris Eng in his August strategy report said that after a good run since mid-February, the research house’s market call for July was off the mark as the July 9 rally turned out to be bigger than expected giving rise to some political uncertainty.
Global factors were also negative as the twin European and US crises intensified, he said on August 1.
“While some may advise to take a defensive stance in August given the run-up to the General Election and as the month coincides with the Ramadhan period, we note instead that these factors have not necessarily constrained market gains in the past.
“Instead, we are betting on the US debt ceiling crisis being resolved and advise investors to position for a possible rebound with Banks and Property stocks being the best bets,” he said.
Among the gainers, Chin Teck rose 25 sen to RM8.88, Taliworks 14 sen to RM1.30, EPIC 13 sen to RM2.93, CIMB and Petronas Dagangan 12 sen each to RM8.39 and RM17.36, while Carlsberg, Petronas Chemicals and BAT added 10 sen each to RM7.45, RM6.95 and RM46.60 respectively.
Jotech was the most actively traded counter with 18.64 million shares done. The stock added half a sen to 16 sen.
Other actives included DVM, Dutaland shares and warrants, Ingenuity Solutions and Prestariang.
Decliners included Ann Joo, PPB, Hartalega, TGL, Mamee, LTKM and PCCS.

Source: The edge