The expected changes in US monetary policies confuse the financial markets


Paste: EGX30 will move sideways between 10400-11000 points

Maati: EGX70 tests the level of 2850 points in a corrective bounce

Financial market traders around the world were confused after the US Federal Reserve announced an approaching gradual decrease in the asset purchase program, and indicated that the bank had become more willing to raise interest rates. Interest rates in the United States, which leads to the displacement of large sums of foreign investment from emerging markets to the American market with the expected rise in interest rates on US bonds.

The interest rate in Egypt on both deposit and overnight lending is currently 8.25% and 9.25%, respectively, while the main operation rate and the discount and credit rate are 8.75% for each, after fixing the interest in the last meetings of the Monetary Policy Committee.

Dealers in the Egyptian Stock Exchange expected that the main index would complete the corrective upward movement towards the resistance levels, provided that it would reach the level of 10800 points, with the support of the recovery of the leading shares from the effects of the successive decline that the market witnessed its peak in the sessions of last week.

The main index of the Egyptian Stock Exchange EGX30 fell by 3.2% at the close of trading last week, at the level of 10,642 points, while the EGX70 EWI index fell by 3.6% to settle at the level of 2763 points.

Mohab Ajina, head of the technical analysis department at Beltone Financial Holding Company, said that the main stock index broke an important support level at 10,800 points during the sessions last week, and advised investors to close marginal buying positions.

He explained that the performance of the stocks leads the market towards an upward corrective movement, which leads it to retest the resistance level of 11500 points at its end, and the EGX30 index will move sideways between the levels of 10400-11000 points.

The “EGX30 capped” index decreased by 3.6%, stable at the level of 13017 points, and the broader EGX100 index fell by 3.7%, stable at the level of 3722 points.

Mohamed Maati, Head of Technical Analysis at Thimar Securities Company, said that the main index will complete its performance within the framework of the corrective rebound towards the levels of 10800 points – 11200 points, and the upper boundary of the transverse channel in the medium term at the level of 11,675 points.

He advised the dealers to be careful and wary of the high risk ratios and to choose the stocks well to enter into quick trades with the continuation of the current market performance, and the expected monetary policy adjustments.

He explained that the index of small and medium companies will test the levels of 2850 points, then 2950 points, and complete its rebound to the upside.

The market recorded trading values ​​of 19.7 billion pounds at the end of last week, through the circulation of 2.02 billion shares, by implementing 241 thousand buying and selling operations, compared to the previous week’s trading, which amounted to 22.9 billion pounds and the amount of 2.4 billion shares traded, through 246 operations, to stabilize the market capital of shares Restricted at the level of 709 billion pounds.

Foreign transactions turned into a net purchase of 2.3 million pounds, with a 5.7% acquisition of shares.

Shares accounted for 33.4% of the Egyptian Stock Exchange’s trading during the past week, while the value of bonds trading accounted for 66.6% of transactions.

The article expected changes in US monetary policies confuse the financial markets was written in Al Borsa newspaper.