FBM KLCI higher on select blue chip gains

KUALA LUMPUR: Investor sentiment for global equities turned firmer at the start of the new week. Bellwether indices in key Asian markets opened higher and stayed in positive territory throughout the trading day.

Confidence has seen flip flops in the past few weeks as investors switched between optimism and concerns over the health of the global economy. On Monday, the mood was upbeat.

Investors pushed stock prices higher on hopes of a bailout for debt-ridden Greece and slower growth in China's manufacturing activity for the month of February. The timing and terms of the Germany and French-led bailout package remain unclear but hopes of a resolution by week's end assuaged worries, at least for now.

Meanwhile, China's slower manufacturing growth in February also tempered concerns that the government will take further measures to rein in excessive bank lending and investments in industries already facing over capacity. The People's Bank of China had already raised reserve requirements for banks twice this year to prevent an assets bubble.

We expect trading will continue to be choppy in the near term until there is greater clarity on economic recovery. One of the key data to look out for will be the US employment report due out at the end of the week.

On Bursa Malaysia, the FBM KLCI traded on a stronger footing helped by gains in select blue chip stocks. The benchmark index opened higher and gained in strength as the day progressed. It closed 12.6 points higher at 1,283.4 points. Some of the big gainers were blue chips Nestle, BAT, CIMB, RHB Capital, YTL and Axiata. Trading volume improved to 1.05 billion shares worth RM1.75 billion.

Market breadth, however, was more ambivalent. Losing counters outnumbered gaining ones by 11 to 10 at the close. Among the more actively traded top losers were Ramunia and Ramunia-WA.

Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.