RTTNews - The winning streak has reached three sessions for the Malaysian stock market, which has gathered more than 18 points or 1.6 percent along the way. The Kuala Lumpur Composite Index closed above the 1,170-point plateau, and now analysts are expecting the market to hold steady in a tight range near that level when it kicks off trade on Tuesday.
The global forecast for the Asian markets provides little in the way of guidance as weakness among the financials and retail stocks is expected to be offset by gains among the oil and steel shares. The European markets finished on a positive note, while the U.S. markets ended little changed - and the Asian markets also are likely to trade in mixed fashion but may fall prey to profit taking following strong rallies on Monday.
The KLCI finished solidly higher on Monday, thanks to major gains among the financial stocks, while the plantation stocks and the industrial issues finished with more modest gains.
For the day, the index climbed 10.70 points or 0.92 percent to close at the daily high of 1,174.49 after dipping as low as 1,163.79. Volume was 694.863 million shares worth 1.11 billion ringgit. There were 390 gainers and 239 decliners, with 224 stocks finishing unchanged.
Among the gainers, KNM Group, Jetson-Wa, British American Tobacco, Genting, Tanjong, Sime Darby, Axiata, Maybank, Bumiputra-Commerce and IOI Corp all finished higher. Finishing lower, MSports, TIME, Genting Malaysia, MRCB, DLady, MSC and LaFarge all ended to the downside.
The lead from Wall Street is virtually flat with perhaps a touch of downside as stocks moved back to the downside over the course of the trading session on Monday, ending the day nearly unchanged after seeing some early strength. The major averages closed on opposite sides of the unchanged mark.
This morning, traders reacted to comments from a number of central bankers over the weekend at the Federal Reserve conference in Jackson Hole, Wyoming, indicating that interest rates are likely to remain fixed for some time despite some signs of economic stabilization. At the conference, Federal Reserve Chairman Ben Bernanke said, Economic activity appears to be leveling out, both in the United States and abroad. Bernanke also noted that the prospects for a return to growth in the near term appear good.
However, the optimism was partly offset by comments from economist Nouriel Roubini, who said that he sees a big risk of a double recession in an article for the Financial Times. Roubini, who predicted the magnitude of the recent financial crisis, stated that the global economy might bottom out in the second half of the year and that the economies in the U.S and other European countries might witness anemic or below trend growth for at least a couple of years.
The pullback by the markets was also partly due to comments from Sun Trust (SIT) CEO James Wells, who said that financial institutions are likely to incur further losses amid the dismal condition of the commercial real estate market.
In other news, conflicting reports have led to speculation over the health of Bernard Madoff, perpetrator of the largest Ponzi scheme in history, who may be dying of cancer at a federal prison in North Carolina. However, prison officials have refuted the cancer claim that a number of media outlets reported earlier.
The major averages saw choppy movement in late session dealing, resulting in a mixed close to kick off the week. While the Dow closed up by 3.32 points or less than a tenth of a percent at 9,509.28, the NASDAQ slipped by 2.92 points or 0.1 percent to 2,017.98 and the S&P 500 fell by 0.56 or 0.1 percent to 1,025.57.
In economic news, the Malaysian central bank will on Tuesday announce its decision on interest rates, with analysts broadly expecting the bank to keep the standard on hold at the current level of 2 percent.
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