RTTNews - One day after ending the modest three-day winning streak in which it had collected more than 22 points or 2.1 percent, the Malaysian stock market turned right back to the upside. The Kuala Lumpur Composite Index regained the 1,060-point level one day after giving it up - and now ahead of Monday's market holiday in honor of the king's birthday, the Malaysian stock market is tipped to add modestly to those gains.
The global forecast for the Asian markets is positive following U.S. President Barack Obama's historic speech in Egypt aimed at mending ties with the Muslim world. Some better than expected economic data out of the U.S. adds to the positive sentiment. The European markets finished mixed with a touch of upside, while the U.S. markets ended firmly in positive territory - and the Asian markets are forecast to move higher as well.
The KLCI finished modestly higher on Thursday, defying the regional trend of decline. Financials ended the day sharply higher, while the plantations and the industrial issues finished more modestly higher.
For the day, the index added 8.57 points or 0.81 percent to close at the daily high of 1,063.97 after dipping as low as 1,055.49. Volume was 1.303 billion shares worth 1.265 billion. There were 366 decliners and 221 gainers, with 224 stocks finishing unchanged.
Among the gainers, Tenaga Nasional rose 3.3 percent, while Compugates, KNM Group, Mulpha International, Sime Darby and Maybank also ended higher.
The lead from Wall Street is optimistic as stocks resumed their upward move on Thursday following a modest pullback in the previous session. The major averages firmed their position in positive territory in mid-afternoon trading after an uncertain start to the day's session, posting strong gains on the day.
Ahead of the start of trading, traders were presented with employment data from the Labor Department that showed a decrease in first time jobless claims for the week ended May 30. The report also indicated the first decrease in continuing claims in 20 weeks as initial jobless claims fell to 621,000 from the previous week's revised figure of 625,000. Economists had been expecting jobless claims to edge down to 620,000 from the 623,000 originally reported for the previous week.
Continuing claims fell to 6.735 million in the week ended May 23 from the preceding week's revised level of 6.750 million. The modest decrease in continuing claims breaks a recent streak of record highs and marks the first decrease since the week ended January 3.
In a separate report, the Labor Department revised its labor productivity figures for the first quarter, revealing a mild increase in the pace of growth. The report also showed that unit labor costs increased by less than previously estimated.
On the corporate front, membership warehouse operator Costco Wholesale (COST) reported a 7 percent drop in its comparable sales for the four-week period ended May 31 with a 5 percent decline in net sales. A number of other retailers also reported their monthly sales results, with Abercrombie & Fitch (ANF), J.C. Penney (JCP), Bon-Ton (BONT) and American Apparel (APP) all reporting declining sales on a comparable store basis.
Retail giant Wal-Mart (WMT) did not release its monthly sales results, however, as the company announced last month that it would cease providing its monthly results.
The upward move seen over the course of the trading day came as traders shrugged off some uncertainty ahead of Friday's report from the Labor Department detailing the employment situation for the month of May.
The major averages saw further upside in late session trading and closed just off of their best levels of the day. The Dow climbed 74.96 points or 0.9 percent to 8,750.24, the NASDAQ finished up 24.10 points or 1.3 percent at 1,850.02 and the S&P 500 closed up 10.70 points or 1.1 percent at 942.46.
In economic news, Malaysia will on Friday provide foreign reserves numbers for the week ending May 29. Forecasts call for a surplus of $89.85 billion after the $88.03 billion total in the previous week.
Also, Statistics Malaysia said on Thursday that the trade surplus stood at MYR 7.36 billion in April, down from MYR 12.5 billion in March. This was the 138th consecutive month of trade surplus since November 1997. Economists were looking the trade surplus of MYR 12.5 billion.
Exports dropped 26.3 percent year-over-year in April, compared to the 15.6 percent fall in March. Economists had predicted a decline of 21.8 percent. Similarly, imports decreased 24.6 percent in April, after falling 28.7 percent in March. Economists were expecting a decrease of 28.1 percent. On a monthly basis, exports declined 5.6 percent to MYR 41.12 billion in April, while imports rose 8.8 percent to MYR 33.76 billion.
During the January to April period, exports decreased 21.7 percent annually to MYR 62.52 billion, while imports dipped 27.3 percent to MYR 22.44 billion. At the same time, the trade surplus amounted to MYR 40.07 billion.
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