SHARES on Bursa Malaysia are expected to fare better this week after last week's lacklustre performance due to persisting weak sentiment.
Analysts, however, are rather optimistic that this will be reversed this week and talks of when the general election is to take place will not adversely affect the stock market.
"The elections are imminent and this factor has been discounted for quite some time now. Market sentiment this week will most likely be driven by both internal and external developments, which are quite positive," said one analyst.
Another analyst said there is high expectation that the country's strong economic growth last year will be sustained this year and this augurs well for the overall market sentiment.
Standard and Poor's comments on Friday of the government's prudent measures to reduce the country's fiscal deficit is a testimony to Malaysia's strong fundamentals and the direction the economy is going, said the analyst.
Externally, investors are relieved over signs of monetary easing by the European Central Bank and that major central banks will continue to take stimulative steps to support their economies.
US labour market data to be out by the end of the week is also expected to be good, said an analyst, adding that if there is a concern this week, it would involve concerns over the political stalemate in Italy.
The local bourse's psychological barrier level is targeted at 1,700 while support level at 1,630.
Last week, the local stock market went through some selling pressure but losses were marginal, thanks to foreign fund buying into financial and property stocks. Analysts believe this trend will continue this week.
On a Friday-to-Friday basis, the FBM KLCI rose 15.36 points to 1,637.44 compared with the previous Friday's close of 1,622.08.
The FBM Emas Index increased 121.76 points to 11,144.27, and the FBM ACE Index gained 49.53 points to 3,990.41.
Total volume was lower at 4.43 billion units valued at RM7.76 billion compared with 5.02 billion units worth RM7 billion the week before.
The Main Market volume declined to 3.461 billion shares worth RM7.663 billion from the previous week's 3.689 billion shares worth RM6.849 billion.