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4 Factors That Affect FBM KLCI Futures (FKLI)

4 Factors That Affect FBM KLCI Futures (FKLI)

When you are trading a futures contract, it’s imperative to know the factors that may have affected the futures market movement so you can make better informed trading decisions. Different factors may have given different effect for every futures market.

Here are four factors that may have effects on the movement of FBM KLCI futures (FKLI).

(1) Movement of FBM KLCI

As the underlying asset of FKLI, the movement of FBM KLCI has effect on FKLI prices because FKLI reflects the future expectation for FBM KLCI. FBM KLCI on the other hand is affected by both local and global economic conditions.

Local economic conditions such as a flourishing economy, political stability or uncertainty and the growth prospects for a particular sector of the economy can have a major impact on futures prices as these directly affect the economy of the country.

Besides that, FBM KLCI is also affected by the movement of foreign stock markets like the Dow Jones Industrial Average (DJIA), Hang Seng or Nikkei.

(2) Movement of US Markets

S&P 500 and Dow Jones Industrial Average (DJIA) are the two main US stock market indices that have effects on the movement of FKLI. US economic news such as proposed changes in spending or tax policy, as well as Federal Reserve decisions to change or maintain interest rates can have a dramatic effect on these two markets. Political news that has impact on the US economy such as the recent Presidential election will also affect the two US markets thus affecting FKLI as well.

(3) Global economic news

As with any investment, global economic news plays an important role in establishing the futures market sentiment. For example, slow growths for China’s economy or the eurozone crisis have contributed to slow price movement of FKLI.

(4) Movement of foreign futures

Just like the relationship between stock markets, futures contracts may also affect each other. The ups and downs of other foreign futures may have impact on the movement of FKLI. For example, FKLI movement can be affected by the movement of DJIA ($10) futures or S&P 500 futures.

Do you think there are other factors that can affect FKLI prices? Do share your thoughts in the comment box below.

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1 Comment to 4 Factors That Affect FBM KLCI Futures (FKLI)

  • Mysun's Gravatar Mysun
    June 28, 2013 at 8:05 PM | Permalink

    But why many times when the foreign market go down, the FKLI is the only one go up