The Federal Reserve's slash on the rate to spur on the sinking economy provided a fresh lead for the stock markets in the States to leap by 2% on last Thursday. Temporarily, this stabilised the volatile external forces, giving the local bourse a sigh of relief.
Lack of fresh leads and continuing political uncertainty at the local front are expected to keep Bursa Malaysia on base-building phase and quiet trading.
Externally, the Reserve's rescue packages to shore up investor confidence are not expected to take effect in short term. The credit crunch is far from over, with the sources still rooted deep. In the immediate future, the American stocks shall hinge on the potential losses to be sustained in the financial market.
In Asian region, the stocks are expected to tag closely behind that of the United States. But the victory of Ma Ying-jeou in the just concluded presidential election in Taiwan is expected to spur the region's bourses to a fervent run. Ma's open-minded approach to mainland China is predicted to cool off the tense cross-straits relations under President Chen Shui-bian. Regionally speaking, the Ma's syndrome is definitely positive.
The mixed external factors, coupled with the wobbly local political scene have put off funds on wait-and-see. As such, the volume in this week is expected to stay thin in quiet trading.
If you are in the market, you have my best wishes!