RTTNews - The Malaysian stock market has ended higher now in consecutive trading days, gathering more than 30 points or 2.7 percent along the way. The Kuala Lumpur Composite Index broke through resistance at the 1,040-point plateau, although analysts are predicting that the market could hand that level of support right back in Thursday's trade.
The global forecast for the Asian markets is slightly negative on fresh concerns that the worldwide economic slowdown may last longer than originally thought - which could put the financials under pressure. The price of crude oil rose back above $62 to a six-month high, which is expected to provide support for the commodity plays. The European markets provide a positive lead, while the U.S. markets all ended modestly in the red - and the Asian markets are also projected to trend lower.
The KLCI finished sharply higher on Wednesday, thanks to major gains among the plantations and the financial shares, while the industrials ended with more modest gains.
For the day, the index jumped 19.14 points or 1.87 percent to close at 1,042.63 after trading between 1,022.81 and 1,044.77. Volume was 1.872 billion shares worth 1.864 billion ringgit. There were 357 gainers and 307 decliners, with 205 stocks finishing unchanged.
Among the gainers, IOI Corp surged 3.6 percent and Axiata Group jumped 6 percent, while Kuala Lumpur Kepong, Nestle, PPB, Public Bank, Sime Darby, Maybank and Tenaga Nasional also ended higher. Bucking the trend, KNM, TA-WB, SAAG, Scomi, Bumiputra-Commerce and MISC ended in the red.
The lead from Wall Street is modestly pessimistic as stocks finished Wednesday's trading session modestly lower, unable to sustain earlier gains. The major averages all slipped into negative territory in mid-afternoon dealing, closing just off of their worst levels of the day. Trading this week has been largely subdued as many traders sat on the sidelines following considerable profit taking last week, prompted by the run up in equities in recent months.
Traders digested the latest minutes of the Federal Open Market Committee released earlier this afternoon, which revealed some debate within the policymaking arm of the Federal Reserve over whether or not to purchase additional treasury securities. Although the final decision was to stick with the $300 billion agreed on at the March meeting, in late April some officials thought that purchasing more could spur recovery. While there was some debate over whether or not additional purchases would be needed, officials agreed that such a purchase was not warranted at that time.
Earlier, traders heard comments from treasury Secretary Timothy Geithner who issued cautious optimism regarding the recovery of the embattled financial sector, while Bank of America (BAC) was able to raise a substantial amount of capital, further bolstering prospects for the industry. The day's trading was also impacted by better-than-expected earnings from Target (TGT) and Deere (DE).
In other news, the House of Representatives passed a landmark credit card industry reform bill Wednesday afternoon, sending legislation designed to crack down on the credit card industry to President Barack Obama. The 361-64 vote sends the bill Obama's desk and he is expected to sign it as early as Friday.
The major averages all closed slightly lower a late day selloff dragged the indices into negative territory. The Dow closed lower by 52.81 points or 0.62 percent to finish at 8422.04, while the NASDAQ was down 6.70 points or 0.39 percent to end at 1727.84, and the S&P 500 slipped by 4.66 points or 0.51 percent to finish at 903.47.
In economic news, the Department of Statistics Malaysia said on Wednesday that the consumer price index rose 3 percent year-over-year in April, slower than the 3.5 percent increase in the previous month. Economists were looking an increase of 3.2 percent. On a monthly basis, consumer prices declined 0.2 percent in April, marking the same pace as in the preceding month. For the January to April period, consumer prices increased 3.5 percent compared to the same period of the previous year.
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