Market likely to hover within bullish territory

Positive global sentiment and an improved eurozone
credit market is expected to provide an upside momentum to share prices
on Bursa Malaysia this week.

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The local stock market improved significantly recently in the wake
of fresh buying interest, boosted by strong overseas performance, where
most markets were flirting with the bullish territory.

The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) is likely to aim for
the 1,600 level, exceeding the historical peak of 1,597 points achieved
in July 2011.

Indicators are painting a promising landscape,
implying the local bourse will likely sustain the upward thrust in the
immediate term, with the bulls bouncing back and regaining new strength
to re-test the resistance barrier.

A further upward trend could
also boost sentiment among small cap stocks, but this would hinge on
external factors from the eurozone and high oil prices, which could
stifle global growth.


The improvement in the broader market sentiment can be
seen from the global risky assets performance which has gained momentum
while safe-haven assets continued to wind down.

The biggest near-term catalyst will be the European Central Bank's ?530
billion (RM2.09 trillion) liquidity boost, which is the first round of
the bigger ?1 trillion (RM3.96 trillion) financial assistance to avert
a credit crunch, dubbed as a long-term refinancing operation.

Market sentiment is also supported by stronger-than-expected US jobs data.

The fact that the US claims for unemployment benefits dipped to a near
four-year low, while China's manufacturing Purchasing Managers Index
data reached the highest level in five months, may suggest that the
global economy is healthier than thought, with the US economic growth
on the mend and China avoiding a hard landing.

On Friday, the
local bourse rallied amid the stronger market momentum in regional
equities. On a weekly basis, the FBM KLCI earned 25.01 points to
1,583.78 from 1,558.77 last Friday.

The FBM Top100 rose 155.88
points to 10,731.40 from 10,575.52 last week, while the FBM ACE
decreased 8.13 points to 4,702.23 from 4,710.36 and the FBM 70
increased 119.34 points to 12,316.25 from 12,196.91 previously.

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