RTTNews - The losing streak has hit three sessions now for the Malaysian stock market, which has given up almost 40 points or 3.2 percent along the way. The Kuala Lumpur Composite Index has fallen through support at 1,060 points, although analysts are projecting a modest recovery at the opening of trade on Friday.
The Asian markets draw a mildly positive lead from the global forecast as several of the regional bourses have been oversold in recent sessions - the financials in particular. Some better than expected economic data out of the United States is likely to add to the positive sentiment. The European markets ended broadly higher, while the U.S. bourses also finished with mostly modest gains - and the Asian markets are also pegged to move higher.
The KLCI finished sharply lower on Thursday, thanks to major losses in the financial sector, moderate losses among the plantations and mild declines among the industrials.
For the day, the index lost 16.49 points or 1.54 percent to close at 1,054.41 after trading between 1,052.48 and 1,073.26. Volume was 1.733 billion shares worth 1.618 billion ringgit. There were 723 decliners and 90 gainers, with 138 stocks finishing unchanged.
Among the decliners, UEM Land, KNM, Iris, Tebrau Teguh, Maybank, Sime Darby, Public Bank, Tenaga Nasional, PPB, Kuala Lumpur Kepong, Bumiputra-Commerce, Genting and IOI Corp all finished lower.
Wall Street offers a cautiously optimistic lead as stocks finished largely on the upside Thursday after trading in a range for most of the session. While the tech-heavy NASDAQ closed nearly flat, the Dow and the S&P 500 posted notable gains as traders reacted to some encouraging economic data.
Some buying interest was generated by the release of a report from the Philadelphia Federal Reserve showing that the pace of contraction in the mid-Atlantic region's manufacturing slowed by much more than economists had been anticipating. The Philly Fed said its index of activity in the manufacturing sector rose to a negative 2.2 in June from a negative 22.6 in May, although a negative reading still indicates a contraction. Economists had been expecting a much more modest increase to a reading of negative 17.0.
Separately, a report from the Conference Board showed that its leading indicators index rose 1.2 percent in May following an upwardly revised 1.1 percent increase in April. Economists had expected the index to increase by 1.0 percent, matching the increase originally reported for the previous month.
While employment data from the Labor Department showed an increase in weekly jobless claims, some optimism was generated by a drop in continuing claims, which fell by 148,000 in the week ended June 6th to 6.687 million. This marked the first drop in continuing claims since the week ended January 3rd.
Meanwhile, on Capitol Hill, both Republicans and Democrats on the Senate Banking Committee expressed skepticism about Treasury Secretary Timothy Geithner's proposal to set up the Federal Reserve as the primary regulator of risks to the entire financial system. Geithner responded by pointing out that central banks around the world generally have the authority to set monetary policy and to deal with the stability of financial systems.
After closing lower in the three previous sessions, the Dow closed up 58.42 points or 0.7 percent at 8,555.60 and the S&P 500 closed up 7.66 points or 0.8 percent at 918.37. Meanwhile, the NASDAQ underperformed throughout the session and closed down 0.34 points or less than a tenth of a percent at 1,807.72.
In economic news, the Department of Statistics Malaysia said on Thursday the manufacturing sales value decreased 26.2 percent year-on-year in April to 35.9 billion ringgit, after falling a revised 25.6 percent in March. Month-on-month, the sales value was down 1.6 percent in April. The number of employees in the manufacturing sector totaled 944,058 in April, down 7.7 percent from the previous year. Salaries and wages paid fell 9.4 percent annually to 1.8 billion ringgit. On a monthly basis, the number of employees declined 1.1 percent, while salaries and wages declined 0.2 percent. Productivity of labor was down 0.5 percent.
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