RTTNews - The Malaysian stock market has finished lower now in two of four sessions since the modest two-day losing streak in which it had shed a dozen points or 1.2 percent. The Kuala Lumpur Composite Index remained just shy of the 1,180-point plateau, and now analysts are expecting the market to ease further to the downside at the opening if trade on Thursday.
The global forecast could signal selling pressure for the Asian markets, thanks largely to continued profit taking for several of the key bourses following sharp advances last week. Oil, health insurance and telecommunication shares are expected to see additional pressure, with some support coming from bargain hunting among the financials and the properties. The European markets finished firmly in negative territory, while the U.S. bourses ended slightly in the red - and the Asian markets also are tipped to head to the downside.
The KLCI finished barely lower on Wednesday after modest gains at the opening of trade. Financials ended lower, as did retailers while the plantation shares were mixed.
For the day, the index eased 0.39 points or 0.03 percent to close at 1,179.49 after trading between 1,178.16 and 1,185.38. Volume was 924 million shares worth 1.621 billion baht. There were 351 decliners and 315 gainers, with 234 stocks finishing unchanged.
Among the decliners, Nestle, Carlsberg, Lafarge, BCHB, Sime Darby, Maybank, YTL, Tenaga and Axiata all finished lower, while IOI Corp, AMMB and MMC Corp saw modest gains.
The lead from Wall Street is mildly negative as stocks finished Wednesday's session moderately lower after disappointing data on the health of the service sector and the labor market generated some selling pressure. The major averages all closed in negative territory, offsetting some of their recent gains.
Prompting some negative sentiment in the markets was a report from the Institute for Supply Management on activity in the service sector in the month of July, which showed that the pace of contraction in the sector unexpectedly accelerated from the previous month. The ISM said its index of activity in the sector edged down to 46.4 in July from 47.0 in June, with a reading below 50 indicating a contraction in the sector. The decrease came as a surprise to economists, who had expected the index to rise to 48.0.
A separate report released by payroll processor Automatic Data Processing (ADP) showed that private sector employment saw another notable decline in the month of July, although the pace of job losses slowed to its slowest rate since October of 2008. ADP said non-farm private employment fell by 371,000 jobs in July following a revised decrease of 463,000 jobs in June. Economists had been expecting a decrease of about 350,000 jobs compared to the loss of 473,000 jobs originally reported for the previous month.
Meanwhile, the U.S. Commerce Department revealed that factory orders rose 0.4 percent in June, surprising economists, who had expected orders to drop 0.8 percent.
On the earnings front, traders reacted to a mixed bag of earnings, with Procter & Gamble (PG), Kraft Foods (KFT), Ralph Lauren (RL) and Electronic Arts (ERTS) largely beating bottom line estimates while falling short on the revenue front.
The major averages saw a late session recovery attempt fizzle, leading to a negative finish. The Dow closed down by 39.22 points or 0.4 percent at 9,280.97, the NASDAQ slipped by 18.26 points or 0.9 percent to 1,993.05 and the S&P 500 fell by 2.93 points or 0.3 percent to 1,002.72.
In economic news, Malaysia's Department of Statistics said on Wednesday the trade surplus stood at MYR 9.12 billion in June, down from MYR 10.02 billion surplus in May. Economists had expected a surplus of MYR 9.6 billion.
Exports dropped 22.6 percent annually in June to MYR 45.1 billion, after falling 29.7 percent in May. Economists expected a drop of 25.3 percent. Imports declined 20.8 percent to MYR 35.99 billion compared to a 27.8 percent decrease in the preceding month. Economists expected imports to drop 25.6 percent.
On a monthly basis, exports grew 5.1 percent, while imports rose 9.4 percent in June.
For the first six months of the year, exports decreased 23.4 percent, while imports were down 26.3 percent compared to last year.
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