FKLI Market Outlook 03 April 2009

US MARKET

8000 level…, reached but did not manage to sustain. Although this may dent the sentiment and confidence of the investors, we will still remain our bullish bias towards the DJIA and expecting that the DJIA will manage to break the 8000 level in the near term. Surged in overnight DJIA (+216 points, +2.79%) as a result of the outcome of the G20 where world leaders agreed to overcome the recession by pledging more than $1 Trillion in aid and the accounting regulators approved a rule change that may boost bank profits. [Reminder: US will release its Nonfarm Payrolls (Survey –660K Vs Prior –651K Vs) and Unemployment Rate (Survey 8.5% Vs Prior 8.1%) data later tonight]

FKLI

It was a bull run all the way and breached the 900 psychological barriers as buyers were dominant amid tracking solid rally from regional markets. The KLCI ended higher at 905 after adding 21points supported by construction, properties and mining sector which gained at least 4% yesterday. Total volume surged to record high at 841M shares valued at RM1.208B changed hand..

Meanwhile the April contract surged to 913 after gaining about 33points. Total volume increased to 11,743 while open interest add up to 18,772.Asian stocks shot to a three-month high on Thursday, building a three-day rally on hopes the U.S. economy has bottomed. As a result, the HSI gained about 1000points to 14,512, the biggest gain this year with HSBC at the helm after encouraging U.S. home and factory sales data sparked optimism about the world's largest economy. Nikkei surged about 367points to 8,719 due to better- than-expected auto sales and indicators in the U.S. stoked speculation the world’s biggest economy is recovering. The recent 900 mark breakthrough on firmer composite index as well as better than expected performance from regional and U.S markets could mean more rally in the near term.

Besides, both the KLCI and FKLI manage to secure above the MA 50 and MA 100, indicating the market is in Bullish mode and investors are not advisable to go SHORT at this level. However, traders are advised to exercise their trade with caution as we expect the market might technically consolidate downwards due to overbought position yesterday. For today, the resistance is seen at 930 level and the support is situated at 900 – 880 levels.