The Malaysian stock market has finished lower now in back-to-back sessions following the five-day winning streak in which it collected more than 50 points or 6 percent. The Kuala Lumpur Composite Index fell back below the 910-point level, although analysts predict that the market could regain that level at the opening of trade on Thursday.
The global forecast for the Asian markets is fairly positive after suffering a modest downside correction in the previous session. Mixed economic and corporate data out of the United States is expected to keep the markets from straying too far from the unchanged line in either direction. The markets in Europe, Canada and the United States all finished with modest gains, and the European markets are projected to follow that path.
The KLCI finished sharply lower on Wednesday, as investors continued to lock in gains from the recent winning streak. The financials were down sharply, while the plantations and the industrials finished with more modest declines.
For the day, the index lost 11.97 points or 1.30 percent to close at the daily low of 907.87 after peaking at 921.04. Volume was 613.012 million shares worth 945.836 million ringgit. There were 352 decliners and 144 gainers, with 178 stocks finishing unchanged.
Among the decliners, Maybank eased 2.6 percent and Genting was down 4 percent, while KNM, Mulpha International, Tenaga Nasional, TM, Sime Darby and Maybank also ended in the red.
The lead from Wall Street is cautiously optimistic as stocks ultimately closed higher after enduring choppy trading for much of Wednesday's session. The uncertainty seen for most of the day came as investors responded to a mix of positive and negative news from both the economic and corporate fronts.
In economic news, wholesale inventories fell by much more than economists had been expecting in the month of February, according to a report released by the Commerce Department, although the report also showed an increase in wholesale sales. The report showed that wholesale inventories fell 1.5 percent in February following a revised decrease of 0.9 percent in January. Economists had expected inventories to fall by 0.6 percent compared to the 0.7 percent decrease originally reported for the previous month.
At the same time, the Commerce Department said that wholesale sales edged up 0.6 percent in February following a 2.4 percent decrease in January. The increase in sales came on the heels of seven consecutive monthly decreases.
Separately, the Mortgage Bankers Association revealed that its index of mortgage application volume rose 4.7 percent on a seasonally adjusted basis for the week of April 3rd following a 3 percent increase in the previous week.
Later, stocks saw some weakness on the heels of the minutes of the March Federal Open Market Committee meeting, which said that committee members remain concerned about downside risks to an already weak outlook for economic activity. The minutes showed that nearly all of the meeting participants felt that economic conditions had deteriorated relative to their expectations at the time of the January meeting.
On the corporate front, Pulte Homes (PHM) has agreed to acquire rival Centex Corp. (CTX) in a stock-for-stock deal. The deal is valued at $1.3 billion and will create the nation's largest homebuilding company. Under the terms of the agreement, Centex shareholders will receive 0.975 shares of Pulte common stock for each share of Centex they own. Based on Pulte's closing price on Tuesday, the deal values Centex at $10.50 per share, a 38 percent premium to Centex's closing price.
Meanwhile, Dow component Alcoa (AA) reported a $497 million net loss for the first quarter, hurt by the impact of the economic downturn on its core industrial and commercial markets as well as an historic decline in aluminum prices.
The major averages all ended the day in positive territory, although off their best levels of the day. The Dow closed up 47.55 points or 0.6 percent at 7,837.11, the NASDAQ closed up 29.05 points or 1.9 percent at 1,590.66 and the S&P 500 closed up 9.61 points or 1.2 percent at 825.16.
In economic news, Malaysia will on Thursday announce industrial production numbers for February. Forecasts anticipate a decline of 13.5 percent on year following the 20.2 percent annual fall in January.
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