The winning streak has reached six sessions now for the Malaysian stock market, which has gathered 50 points or 5.5 percent along the way. The Kuala Lumpur Composite Index cracked resistance at 960 points, and now analysts are anticipating additional modest gains at the opening of trade on Friday.
The global forecast for the Asian markets is positive, thanks to better than expected earnings news on the corporate front - which may provide the technology and financial sectors with a lift. The United States also reported some economic news that beat expectations, sending Wall Street significantly higher. The European bourses also ended with sharp gains, and the Asian markets are expected to track higher as well.
The KLCI finished modestly higher on Thursday, fueled by strength from the financial shares - although the gains were largely offset by weakness among the industrial issues and the plantation stocks.
For the day, the index gained 4.60 points or 0.48 percent to close at 961.28 after trading between 953.63 and 969.93. Volume was 196.505 million shares worth 146.44 million ringgit. There were 310 gainers, 414 decliners and 164 stocks finishing unchanged.
Among the gainers, Tenaga Nasional was up 6.2 percent, while Maybank, Bumiputra-Commerce, Axiata Group, Iris Corporation, TA Enterprise, Petronas Dagangan, British American Tobacco and Nestle (Malaysia) also finished higher. Finishing lower were KNM, Sime Darby and IOI Corporation.
The lead from Wall Street is broadly optimistic as stocks moved sharply higher over the course of the trading session on Thursday, with the major averages all closing firmly in positive territory after seeing some earlier uncertainty. As was the case in the previous session, a late day rally contributed to the higher close.
In corporate news, financial services giant JP Morgan (JPM) released its first quarter financial results before the start of trading, reporting earnings that fell year-over-year but came in above analyst estimates. JP Morgan reported first-quarter net income of $0.40 per share compared to $0.67 per share in the year ago quarter. Analysts had expected the company to report earnings of $0.32 per share. Revenues also came in better than expected.
Additionally, mobile phone giant Nokia (NOK) generated some buying interest after the company reported first quarter earnings that fell sharply year-over-year but said it expects second quarter worldwide mobile device volume to be flat or show modest sequential growth.
On the economic front, a Commerce Department report showed that housing starts fell 10.8 percent to an annual rate of 510,000 in March from the revised February estimate of 572,000. Economists had expected starts to slip to 540,000 from the 583,000 originally reported for the previous month.
Meanwhile, the Labor Department said initial jobless claims fell to 610,000 from the previous week's revised figure of 663,000. Economists had expected jobless claims to edge up 658,000 from the 654,000 originally reported for the previous week. However, continuing claims rose to a new record high.
Separately, the Philadelphia Federal Reserve said its index of regional manufacturing activity rose to a negative 24.4 in April from a negative 35.0 in March. While a negative reading indicates a contraction in the sector, the index increased by much more than expected.
The major averages moved off their best levels of the day going into the close but still ended the day sharply higher. The Dow closed up 95.81 points or 1.2 percent at 8,125.43, the NASDAQ closed up 43.64 points or 2.7 percent at 1,670.44 and the S&P 500 closed up 13.24 points or 1.6 percent at 865.30. With the gains, the Dow and the S&P 500 ended the session at their best closing levels in over two months, while the tech-heavy NASDAQ finished the day at its best closing level since early November of 2008.
In economic news, Malaysia's Department of Statistics said on Thursday that the value of manufacturing sales dropped 26.1 percent year-on-year in February, at a slower pace compared to a revised 29.1 percent fall in January. The statistical office said 77 industries out of a total of 116 industries contributed to the drop in sales value. In February, the number of employees in the manufacturing sector declined 6.5 percent year-on-year to 960,652. Salaries and wages paid dropped 8.3 percent. Productivity or average sales value per employee was down 20.9 percent.
Month-on-month, the value of manufacturing sales was down 2.2 percent in February. At the same time, the number of employees dropped 2.7 percent and salaries and wages paid declined 2.6 percent. However, productivity rose 1.5 percent. In the January-February period, the value of manufacturing sales dropped 27.6 percent to MYR66.6 billion.
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