20070319 15:14. The FKLI is undergoing a strong uptrend day..... In the morning the psychology was to "Sell! Sell! China raises interest rates, Malaysia Bank Negara sure to follow. Bad for the stock market" A local equities research house wrote ""We will probably see share prices on our Malaysian stock exchange face renewed selling pressures today, which in turn
will likely lead to a marginal downward bias in the key Kuala Lumpur Composite Index (KLCI) performance. This comes as China’s central bank has raised interest rates (by 0.27%) over the weekend in an effort to cool investment amidst a robust economy. Whilst the rate hike was not entirely surprising, nervous investors might be concerned about possible future tightening measures. Recall that a plunge in the Chinese stocks in end-Feb has then triggered a global
equity sell-off." This is logical, but logic or fundamentals have less importance in today's markets. An example of how trader psychology is screwed up by hype on "fundamental" news.