RTTNews - The Malaysian stock market was off just a handful of points on Tuesday, but that was enough to put an end to the five-day winning streak in which it had collected more than 75 points or 6.5 percent. The Kuala Lumpur Composite Index maintained support at 1,130 points, and now analysts are predicting that the market will add modestly to its totals at the opening of trade on Wednesday.
The global forecast for the Asian markets remains positive, although many of the regional bourses are riding lengthy winning streaks and may see some more of the profit taking that crept into trade towards the end of the previous session. Biotechnology, chemical and pharmaceutical stocks are tipped higher, while the financials could ease under pressure. The European and U.S. markets finished higher again, and the Asian markets are expected to follow suit.
The KLCI finished slightly lower on Tuesday, as investors locked in gains from the recent winning streak. Gains among the plantations and the industrial issues were largely offset by weakness in the financial sector.
For the day, the index eased 4.55 points or 0.40 percent to close at 1,134.70 after trading between 1,132.06 and 1,144.24. Volume was 912.362 million shares worth 1.490 billion ringgit. There were 427 decliners and 209 gainers, with 239 stocks finishing unchanged.
Among the actives, Tenaga, KNM, Axiata and Tebrau Teguh all finished lower, while UEM Land Holdings, Sime Darby and Telekom were unchanged and Maybank ended slightly higher.
The lead from Wall Street is cautiously optimistic once again as a spike in buying interest in the afternoon helped stocks to finish modestly higher on Tuesday after showing a lack of direction for much of the day. The major averages all finished in positive territory by solid margins, building on their recent gains.
Stocks started strong following a slew of largely promising earnings, with five Dow components reporting their quarterly results. Despite beating Wall Street estimates, Caterpillar (CAT), Coca-Cola (KO), DuPont (DD), Merck (MRK) and United Technologies (UTX) saw mixed reaction.
In other news, Federal Reserve Chairman Ben Bernanke testified before the House Financial Services Committee today, stating that the U.S. economy is showing signs of stabilization and that the stimulus authorities pumped into the global economy late last year probably helped to avoid a collapse of the financial system.
Bernanke also said that the Fed is prepared to remove its stimulus when the time is appropriate in order to avoid a spike in inflation. However, he reiterated that the economy is still in a fragile state, with unemployment high and consumer spending shaky.
The Fed chief is scheduled to delivery his second day of testimony before the Senate Banking Committee at 10 a.m. ET Wednesday morning.
Meanwhile, President Barack Obama continued to push for the passage of his healthcare plan this afternoon, looking to gather additional support for the much-discussed bill that aims to provide universal healthcare.
The major averages moved to the upside heading into the close, finishing near their best levels of the day. The Dow advanced 67.79 points or 0.8 percent to 8,915.94, the NASDAQ climbed 6.91 points or 0.4 percent to 1,916.20 and the S&P 500 rose 3.45 points or 0.4 percent to 954.58.
In economic news, Malaysia will on Wednesday provide June figures for inflation, with analysts predicting a decline of 1.4 percent on year following the 2.4 percent annual expansion in the previous month.
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