The KLCI reversed early morning losses in the 2nd session and end up 3.15pts higher at 879.95. Overall sentiment however remained cautious after overnight Wall Street drop. Overnight Wall Street (-121, or 1.51%) retreated as consumer stocks weighed down the broader market. Disappointing earnings by Kraft Foods Inc. and Walt Disney Co. reflected the weak fundamentals. Regional bourses were mostly lower with the exception of HSI. At closed, Nikkei down -1.11% or -89.29. The HIS rose 0.88% or +115 on China's stimulus measures, while STI eased 0.16% to 1,704 due to selling pressure.On the FKLI, the Feb closed up +1.55, 0.14% to settled at 877, 2 pts discount to cash. Overall volume increased to 4597 from 4251 the previous day. The FKLI was holding well towards the closed despite the early losses in the AM session. With the FKLI closing below the major MA, we expect further corrective move in the FKLI in the near term. Given its failure to initiate a successful recovery to above the 21-day SMA at 895 yesterday, the overall technical view on the FKLI not convincing yet. Resistance is currently pegged at its 21- day SMA at 896, while support peg at 865-855. We still maintain a sell-into-strength strategy for the medium to long term with resistance at 885 and 890 bases purely on technical, however, turn slightly positive on Malaysia’s stimulus plan.
(Reminder: Malaysia Exchange will close on next Monday (9th February 2009) in accordance with the celebration of Thaipusam.)
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