ZLBT FBMKLCI Pre-market Outlook 21/03/2011

Malaysian Stocks May See Support At 1,500 Points

The Malaysian stock market has finished higher in two of three trading days since the end of the four-day losing streak in which it had retreated more than 40 points or 2.8 percent. The Kuala Lumpur Composite Index remained just above the 1,500-point plateau, and now analysts are forecasting a tight trading range when the market opens on Monday.

The global forecast for the Asian markets is mixed, with UN airstrikes in Libya capping any upside from gains among the properties, financials and technology shares. Oil and gold also are rising on concerns from the conflict, likely forcing investors to dump airline stocks on higher fuel costs. The European and U.S. markets finished higher on Friday, and now the Asian bourses are tipped to track lightly into positive territory.

The KLCI finished modestly higher on Friday on gains form the financial shares, industrial issues and plantation stocks.

For the day, the index collected 11.80 points or 0.79 percent to finish at 1,503.89 after trading between 1,489.27 and 1,503.89. Volume was 988.923 million shares worth 1.504 billion ringgit. There were 501 gainers and 250 decliners, with 271 stocks finishing unchanged.

Among the actives, Sime Darby, Petronas Chemicals, CIMB Holdings and Axiata all finished higher, while Maybank ended lower.

The lead from Wall Street is cautiously optimistic as stocks failed to sustain an initial rally and gave back some ground over the course of the trading day on Friday but still closed mostly higher. While certain positive developments overseas generated buying interest, lingering concerns helped to limit the upside.

The initial strength on Wall Street came on the heels of news that the G7 nations agreed to undertake a concerted intervention in the foreign exchange markets in an effort to support the Japanese economy following the recent earthquake and tsunami. The highly unusual move came as the Japanese yen's dramatic advance against the U.S. dollar threatened the stability of the island nation's economy. The yen reached a record high versus the dollar on Thursday but retreated sharply on the G7 news.

HAPPY TRADING