STOCKS on the local bourse started the week on a positive footing, thanks to Wall Street’s stronger close last week and in line with regional gains, with the exception of China stocks.

The closely watched Dow Jones Industrial Average and S&P 500 Index gained more than 1% each last Friday. China stocks slumped after excessive margin trading prompted securities regulator to bar brokerages from opening new margin trading accounts for clients for three months.

European stocks, meanwhile, advanced in early Monday trading, in anticipation of more quantitative easing measures when the ECB meets later in the week.

Elsewhere, oil prices stabilised somewhat, recovering to around $48 and $49 for WTI and Brent, respectively.

The benchmark FBM KLCI added 9.74 points or 0.56% to finish higher at 1,753.31. Market breadth was positive with gainers outperforming losers 1.68 to 1.

Market sentiment has improved some in recent days, following steep losses in December and the first week of January. This is due, in part, to tempered expectations for economic growth and the pace of interest rate increases in the US, which will slow capital outflow.

The current rebound may persist in the near-term. However, investors should stay cautious and be nimble as market conditions remain volatile. I am still cautious on the outlook for Malaysian equities for the year.

Currently, I am only holding Willowglen, which closed unchanged at 80.5 sen.

My portfolio is currently registering a gain of 1.6 % since inception, and has still outperformed the benchmark KLCI by 9.0%.

This article first appeared in The Edge Financial Daily, on January 20, 2015.