Cautious start, but index stays above 1,800 level

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KUALA LUMPUR (Jan 26): The FBM KLCI started the week cautiously in line with the global markets, but managed to stay aboce the crucial 1,800-point level in early trade.

At 9am, the FBM KLCI shed 2.59 points to 1,800.49.

The early decliners included Hong Leong Bank Bhd, Petronas Gas Bhd, MISC Bhd, S P Setia Bhd, SapuraKencana Petroleum Bhd, Genting Bhd, IJM Corporation Bhd, Media Prima Bhd and Boustead Holdings Bhd.

At the global markets, the euro skidded to near an 11-year low and U.S. stock futures fell on Monday as Greece's Syriza party promised to roll back austerity measures after sweeping to victory in a snap election, putting Athens on a collision course with international lenders,according to Reuters.

The euro fell to as low as $1.1135 on the vote outcome, not far off an 11-year low of $1.1115 touched on Friday when the common currency took a battering after the European Central Bank unveiled a bond-buying stimulus programme last week, it said.

U.S. stock futures fell 0.6 percent while the Nikkei futures also dropped about 0.5 percent from the local close on Friday on heightened concerns the Greek election results could lead to renewed instability in Europe, said Reuters.

M & A Securities research head Rosnani Rasul in a markte preview Monday said Wall Street ended last Friday on the downtrend, impacted by the skittishness ahead of a rather busy week this week driven by Greece drama and FOMC meeting.

She said the S&P 500 and DJIA erased 11.33 (-0.55%) and 141.38 (-0.79%) points to end at 2,051.82 and 17,672.60 respectively.

She said that to begin with, the outcome of Greece drama, as in its snap poll, will be known this week.

Rosnani said with the opposition party is likely to emerge victorious, the world will be watching the outcome with bated breath.

“Although the possibility of Greece booting out of the Eurozone is quite remote but the loudness of the opposition party loathness towards the Eurozone austerity measures cannot be taken lightly.

Rosnani said another upcoming key event this week will be the US FOMC meeting on the 27th and 28th including the housing statistics that are due on Tuesday. The policy statement by the former will be highly anticipated given its policy strategy in 2015.

“Nonetheless, we don’t think that there will be any concrete decision by then thanks to the softness of the current global oil price. Notwithstanding that, we predict US policy hike in the middle of this year boosted by the US full employment and steady rise in US housing prices.

“As for today, we think that cautiousness and skittishness in risk taking will prevail,” she said.