The Malaysian stock market on Thursday halted the two-day losing streak that had cost it more than 15 points or 2 percent in the process. The Kuala Lumpur Composite Index regained the 910-point level one day after giving it up, and now investors are optimistic that the market will add to those totals on Friday.
The global forecast for the Asian markets is broadly optimistic, with strong gains expected among the financial stocks after better than expected corporate results from banking giant Wells Fargo. Some solid economic news out of the United States adds to the positive sentiment. The European and U.S. markets finished sharply higher, and the Asian bourses are also expected to move significantly to the upside.
The KLCI finished sharply higher on Thursday, thanks to major gains among the financials and the plantations, while the industrial issues finished with more modest increases.
For the day, the index added 10.02 points or 1.10 percent to close at 917.89 after trading between 913.39 and 922.55. Volume was 715.124 million shares worth 990.704 million ringgit. There were 378 gainers and 137 decliners, with 189 stocks finishing unchanged.
Among the gainers, Genting was up 3.3 percent and Maybank added 1.6 percent, while Johan Holdings, MRCB, Sime Darby and Tenaga also ended higher the session and TM and KNM finished unchanged.
The lead from Wall Street is fairly positive again as better sentiment toward the financial sector and encouraging economic news drove stocks substantially higher on Thursday, allowing Wall Street to close out the holiday-shortened week on a high note.
Strong preliminary results from Wells Fargo (WFC) gave hope that the financials were not a lost cause, and some better-than-expected economic data contributed to the improved sentiment. Wells Fargo released preliminary first quarter results that crushed what analysts were expecting. The company said it now expects to report first-quarter earnings of $3 billion or $0.55 per share compared to analyst estimates of $0.23 per share.
Additionally, Barclays plc (BCS) helped lead financials higher after the company announced an agreement for the sale of its iShares business to Blue Sparkle LP, a new limited partnership established by CVC Capital Partners Group SICAV-FIS S.A. The purchase price for the deal was about $4.4 billion.
In economic news, a report from the Labor Department showed that jobless claims fell to 654,000 from the previous week's revised figure of 674,000. Economists had expected jobless claims to edge down to 660,000 from the 669,000 originally reported for the previous week. However, the Labor Department also said that continuing claims rose to a new record high of 5.840 million in the week ended March 28th from the preceding week's revised level of 5.745 million.
Additionally, the Commerce Department said that the U.S. trade deficit narrowed to $26.0 billion in February from $36.2 billion in January. Economists had been expecting the trade deficit to come in at $36.0 billion.
The Dow finished the week above the 8,000 mark after a bout of profit-taking earlier in the week sparked doubt about the market's ability to hold this level. Trading is closed on Friday for the Good Friday holiday. The Dow closed Thursday's trading higher by 246.27 or 3.14 percent at 8,083.38. The NASDAQ ended the session with a gain of 61.88 or 3.89 percent at 1,652.54 and the S&P 500 was up 31.40 points or 3.81 percent by the market close, at 856.56.
In economic news, industrial production in Malaysia dropped 14.7 percent annually in February, the government said on Thursday - at a slower pace compared to a revised 19.8 percent fall in January. Economists expected production to decline only 13.5 percent. On an annual basis, manufacturing output slipped 18.8 percent, while mining output fell 7.3 percent. Production of electricity was down 3 percent in February.
Month-on-month, industrial output declined 3.7 percent in February, reflecting a 9.9 percent drop in mining output, a 0.7 percent fall in manufacturing output and a 0.2 percent decline in production of electricity.
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