"Maybe unnoticed by investing world, but a handful of Asean markets are at or hitting new highs, notably Malaysia, Indonesia with the Philippines not far behind.

"Might want to highlight this to you readership?"

0302 GMT [Dow Jones] Malaysia's KLCI is last up 0.4% at 1609.50, off a new all-time high of 1611.50 touched earlier, bucking declines in most regional markets, as investors shift to defensive plays; dividend stocks and utilities are leading gainers on the KLCI, while construction counters are the biggest winners in the broader market. "The market is going defensive, we're seeing rotational plays and foreign funds taking their money out of high beta markets such as Indonesia," says Affin Investment's head of retail research, Nazri Khan; he tips a 1620 target near term. Speculation of a national election within months is also boosting the market, says Maybank IB analyst Lee Cheng Hooi; he tips a conservative 1620-1629 resistance. Market breadth is positive at 283 gainers against 172 losers, with 324.1 million shares changing hands. Among gainers, Tenaga Nasional (5347.KU) is up 1.5% at MYR6.80, Telekom Malaysia (4863.KU) is up 1.6% at MYR5.78 and Malaysian Resources Corp. (1651.KU) is up 1.7% at MYR1.85. ([email protected])

David Fuller's view Fullermoney has often pointed out the relative strength of ASEAN markets, particularly those which combine abundant natural resources with light manufacturing for consumer products industries. However, beyond the short term, these Asian Tigers are unable to escape the leash effect of the two most influential stock markets which overshadow them.

The most important of these is Wall Street (S&P weekly & daily), which has also been a relative strength performer but saw its recent upward progress checked with last Thursday's downward dynamic. For Malaysia (weekly & daily) to extend its upward break we need to see the S&P hold above its early June low and push further into overhead trading. If it cannot do this we will almost certainly see another upside failure by KLCI, given the nervous conditions in global markets.

The second most important leash for KLCI is China's A-Shares Index (weekly & daily) and the break of its March low is a setback unless immediately reversed. The pattern has deteriorated steadily since the last look at 2500 in late May and although the Index looks oversold and the PER valuation remains historically cheap, an upward dynamic is the minimum required to check this latest slide. Moreover, to establish a medium-term uptrend this Index still needs to sustain a break above 2600.