RTTNews - The Malaysian stock market finished lower on Tuesday by less than a point, but that was enough to snap the winning streak that had stretched to four sessions and gathered more than 30 points or 2.9 percent. The Kuala Lumpur Composite Index remains slightly above the 1,075-point plateau, although traders are expecting further declines on Wednesday.
The global forecast for the Asian markets is laced with pessimism, with continued selling pressure expected for the financials and commodities. Some disappointing economic data out of the United States adds to the negative sentiment that suggests that a global recovery might not be as close as many had thought. The European markets were sharply lower, while the U.S. markets also ended in the red - and the Asian bourses are also expected to follow suit and trade lower.
The KLCI finished barely lower on Tuesday, as investors locked in gains from the recent winning streak. Plantation stocks were up slightly, while the financial and industrial issues finished barely higher.
For the day, the index eased 0.60 points or 0.06 percent to close at 1,075.24 after trading between 1,070.88 and 1,082.74. Volume was 1.288 billion shares worth 1.363 billion ringgit. There were 371 decliners and 232 gainers, with 231 stocks finishing unchanged.
Among the decliners, Sime Darby fell 1.4 percent and CIMB Bank was down 1.7 percent, while Time Engineering, Time DotCom, Tenaga and Bumiputra-Commerce also ended lower. Bucking the trend, Maybank rose 0.9 percent and Public Bank added 0.6 percent, while Talam Corp and KNM also finished in positive territory.
The lead from Wall Street is firmly negative as stocks turned sharply lower as traders digested consumer confidence figures that fell short of expectations after kicking off Tuesday's session showing a mild upward move. The major averages all finished solidly in negative territory, offsetting Monday's gains.
A report from the Conference Board said its consumer confidence index fell to 49.3 in June from a revised 54.8 in May. The decrease surprised economists, who had expected the index to edge up to 55.3 from the 54.9 originally reported for the previous month. The decrease reflected less favorable assessments of both current conditions and the near-term outlook.
Separately, the Institute for Supply Management - Chicago said its index of activity in the manufacturing sector jumped to 39.9 in June from 34.9 in May, although a reading below 50 indicates a continued contraction. Economists had been expecting the index to increase to a reading of 39.0.
Earlier, the S&P Case-Shiller Home Price Index, a closely watched measure of home prices, showed a 0.6 percent decline from March to April, according to a survey of prices in 20 U.S. cities. Home prices were down 18.1 percent compared to the same period last year.
On the corporate front, chipmaker Broadcom (BRCM) announced that it raised its tender offer to acquire all of the outstanding shares of common stock of Emulex (ELX) to $11.00 per share in cash, representing a total equity value of about $912 million. Emulex said its Board of Directors would review the terms of the revised offer.
In earnings news, private education firm Apollo Group (APOL) reported third quarter net income of $1.26 per share, compared to $0.85 per share in the prior year quarter. The earnings beat Wall Street analyst forecasts of $1.12 per share. The stock climbed by 7.8 percent on the day.
Further, tax preparer H&R Block (HRB) reported fourth quarter net income of $2.09 per share, compared to $1.66 per share in the year-ago quarter. The results edged out analyst expectations of $2.05 per share. H&R Block also said it expects fiscal 2010 earnings in the range of $1.60 to $1.80 per share. Analysts currently expect the company to earn $1.66 per share for the year. The stock rose by 10 percent on the day as traders reacted to the news.
The major averages moved off their worst levels late in the session but still posted notable losses. The Dow closed down by 82.38 points or 1 percent at 8,447.00, the NASDAQ dipped by 9.02 points or 0.5 percent to 1,835.04, and the S&P 500 fell 7.91 points or 0.9 percent to 919.32.
In economic news, Malaysia's current account surplus stood at 31.4 billion ringgit in the first quarter, wider than a surplus of 29.6 billion ringgit in the preceding quarter, the Department of Statistics said Tuesday.
The goods and services account surplus improved slightly to 39.5 billion ringgit in the first quarter from 39.2 billion ringgit in the fourth quarter. At the same time, the deficit in the income account narrowed to 3.9 billion ringgit from 5.5 billion ringgit in the preceding quarter. However, the deficit in the current transfers account increased to 4.15 billion ringgit from 4.03 billion ringgit in the fourth quarter.
Meanwhile, the capital account showed a deficit of 64 million ringgit in the first quarter, higher than a deficit of 54 million ringgit in the fourth quarter. However, the deficit in the financial account decreased to 29.7 billion ringgit from 71.8 billion ringgit in the preceding quarter.
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