KUALA LUMPUR (Jan 5): The FBM KLCI edged up in early trade on Monday, lifted by select blue chips including Petronas-linked counters and Tenaga Nasional Bhd, but gains were seen limited.
At 9am, the FBM KLCI added 5.66 points to 1,758.43.
The top gainers included Kuala Lumpur Kepong Bhd, UMW Holdings Bhd, Malaysian Pacific Industries Bhd, Hong Leong Bank Bhd, Tenaga Nasional Bhd, Petronas Dagangan Bhd, PetronasGas Bhd and Hong Leong Financial Group Bhd.
The euro hit a nearly nine-year low versus the dollar on Monday as investors bet on quantitative easing by the European Central Bank while Asian shares were subdued as soft manufacturing surveys soured the mood.
The euro fell to as low as $1.18605, its weakest level since March 2006, having fallen below an important support at $1.20. The common currency last traded at $1.1944, down 0.5 percent from late U.S. trade on Friday.
M & A Securities research head Rosnani Rasul in a market preview Monday said Wall Street closed near its flat lines last Friday as lack of catalyst and cautiousness influenced sentiment.
She said the S&P 500 closed 0.70 points lower (-0.03%) while DJIA ended 9.92 points higher (0.06%) to end at 2,058.20 and 17,832.99 respectively.
“As the global equity market turns its leaf on 2015, we predict many would prefer to take light rate risk ahead of the uncertainty pose by the US next policy move.
“Although the weak global commodity prices may give some reprieve and breathing space for the US Federal Reserve to avert raising policy rate for now but eventually it would be a reality,” she said.
Rosnani said she foresees rapid blowing of rumour mongering and speculative activity as a result of this given the coyness of Janet Yellen over this.
She said this would put additional hurt to risk taking and hence, may compromise risk premium in our view.
“At this stage, lack of catalyst would also hurt risk tolerance.
“We predict the market to continue to be in the doldrums until and unless the US Federal Reserve is clear on its monetary path,” she said.