FKLI Related News

U.S. stocks on Monday suffered their biggest drop since November after a strong showing in Italian elections by groups opposed to the country's economic reforms triggered worry that Europe's debt problems could once again destabilize the global economy. The decline marks the biggest percentage drop for the benchmark Standard & Poor's 500 Index since Nov.7, and drove the S&P down to its lowest close since Jan. 18. Selling accelerated late in the trading session after the S&P 500 fell below the 1,500 level, which has acted as a significant support point. Monday marked the S&P's first close under 1,500 since Feb. 4.

Italy's center-left coalition holds a slim lead over former Prime Minister Silvio Berlusconi's center-right bloc in the election for the lower house of parliament, three TV projections indicated. But any government must also command a majority in the Senate, a race that is decided by region. The resulting gridlock in parliament could lead to new elections and cast into doubt Italy's ability to pay down its debt.  "Europe hasn't gone away as an issue, it is going to hang around, and it is rearing its ugly head today," said Stephen Massocca, managing director of Wedbush Morgan in San Francisco. "If someone gets elected who is simply not going to play by the rules, what are they going to do? It puts them in a real quandary here because their financial support, their monetary support is all stipulated by the fact that these austerity programs are going to be in place."

In Monday's volatile session, banks and other financial stocks were among the worst performers on worries about the sector's exposure to Italy's massive debt. The KBW Bank Index fell 2.7 percent. The CBOE Volatility Index ended at 18.99, up 34.02 percent. The Dow Jones industrial average dropped 216.40 points, or 1.55 percent, to 13,784.17 at the close. The Standard & Poor's 500 Index lost 27.75 points, or 1.83 percent, to 1,487.85. The Nasdaq Composite Index fell 45.57 points, or 1.44 percent, to 3,116.25.

Political uncertainty on the home front, though, is also on Wall Street's mind. U.S. equities will face a test with the looming debate over so-called sequestration - U.S. government budget cuts that will take effect starting on Friday if lawmakers fail to reach an agreement over spending and taxes. The White House issued warnings about the harm the cuts are likely to inflict on the economy if enacted. 

Asian shares will likely take their lead from overnight plunges in global equities while currency markets remain jittery on Tuesday as the uncertainty over Italy's election results fuels fears of a resurgent euro zone debt crisis. Gold gained its most in nearly five months on Monday, with safe-haven buying lifting the precious metal in post-session electronic trade as U.S. stocks slid and as oil reversed an early rally.

[Reuters]

Stocks on Bursa Malaysia ended higher yesterday in line with regional bourses riding on the improved external sentiment. Today’s Support and Resistance for FKLI February contract is located around 1,610 and 1,630 respectively.