My Metastock Journal: KLSE Stock Market Chronology

This week we had an interesting market situation with the latest round of fury between the US and North Korea.

The following chronology of news published on TheStar website together with some interesting points extracted from the articles.

1) Tuesday, 8 August - Asian stock markets up on positive outlook

Asian stock markets were mostly higher, despite slower-than-expected growth in Indonesia, as investors stayed positive about the region’s economic outlook.

Sentiment in the market was also bolstered by Wall Street’s record-breaking performance.

Foreign investors continued to buy Malaysian stocks last week despite the selloff in regional peers, including Thailand and Indonesia, according to MIDF Research in a report.

Templeton Emerging Markets Group chairman Mark Mobius tweeted last week that “valuations in emerging markets remain attractive relative to developed markets.”

More news, Asian stock markets up on positive outlook

2) Wednesday, 9 August - Market selldown short-lived

The sudden drop in these stocks, for no apparent reason, had caught traders unaware and market chatter was that some traders had to fill in their margin calls from stocks which were initially heavily sold down on late Monday, thus the cascading effect on the broader stock market that was carried on to Tuesday.

Analysts still viewed the KLCI levels as being undervalued as compared with the regional performance, and that the local market had further room to catch up with its global and Asian peers.

The present view among analysts is generally mixed on whether small-cap stocks are truly fully valued on a historical and forward perspective.

In a similar vein, Areca Capital’s chief executive officer Danny Wong said it was difficult to say if small-cap counters had overstretched their valuations as of now, and that the earnings report for the second quarter would be key.

More news, Market selldown short-lived

3) Thursday, 10 August - Now investors have plenty of reason to sell Asia stocks

Japanese equities hadn’t been rising much despite positive earnings results, so investors had started jumping at shadows, doubting whether they should really be holding onto Japanese stocks.

North Korea is being used as a reason to sell Japanese stocks, just as it was used yesterday in the US.

More news, Now investors have plenty of reason to sell Asia stocks

4) Saturday, 12 August - Threat of war weighs market

The local bourse is due for a pullback anyway, as the recent rally had pushed the market into overbought condition and the war of words between the United States and the North Korea came at the right time, thus providing a perfect trigger.

More news, Threat of war weighs market

Here are some KLSE Indices daily charts.

Daily chart of FBM KLCI.