The winning streak has reached eight sessions for the Malaysian stock market, which has gathered nearly 60 points or 6.5 percent along the way. The Kuala Lumpur Composite Index is closing on resistance at 970 points, but investors are bracing for an abrupt end to the streak as the market is expected to follow the rest of the region to the downside on Tuesday.
The global forecast for the Asian markets is sharply negative after disturbing earnings news from Bank of America, which is expected to put financial stocks under heavy pressure throughout the region. The price of crude oil also plummeted overnight, which could put the heat on many of the resource stocks. The European and U.S. markets all suffered heavy losses across the board, and the Asian bourses are expecting a similar fate.
The KLCI finished slightly higher on Monday, as mild gains among the industrial issues and the plantation shares were largely offset by weakness among the financials.
For the day, the index ticked higher by 3.20 points or 0.33 percent to close at 968.37 after trading between 957.57 and 968.37. Volume was 796.464 million shares worth 883.539 million ringgit. There were 327 decliners and 233 gainers, with 198 stocks finishing unchanged.
Among the gainers, Genting rose 4.7 percent, while Sime Darby, Tenaga Nasional, DRB-HICOM, KNM Group, Axiata and Proton also finished higher. Finishing lower, Maybank slid 2.3 percent, while UEM Land and Chin Well also ended in the red.
The lead from Wall Street is broadly pessimistic as stocks moved sharply lower over the course of the trading day on Monday, with the major averages giving back some ground after closing higher for six straight weeks. A negative reaction to the latest earnings news inspired traders to do some profit taking.
Bank of America released its first-quarter results before the market open. While the company posted a better earnings figure than analysts had expected, a significant increase in loan loss protection made investors wary of holding onto the stock.
On the economic front, the Conference Board said its leading economic index fell 0.3 percent in March following a revised 0.2 percent decrease in February. The agency noted that the index has not risen in the past nine months.
In merger news, Sun Microsystems (JAVA) agreed to be acquired by Oracle (ORCL) for $9.50 per share in cash. The offer represents a 42 percent premium to Sun's closing price on Friday. Oracle expects the acquisition to be accretive to its earnings by at least $0.15 per share on a non-GAAP basis in the first full year after closing.
Additionally, Pepsi Bottling Group (PBG) and PepsiAmericas (PAS) showed strong upward moves after PepsiCo (PEP) offered to acquire both bottlers for about $6 billion.
Also, with the price of crude oil showing a steep decline, closing down $4.45 at $45.88 a barrel, the oil services sector saw substantial weakness. Reflecting the weakness in the sector, the Philadelphia Oil Services Index closed down 6.7 percent.
The major averages saw some further downside in the latter part of the trading day, ending the session near their worst levels of the day. The Dow closed down 289.60 points or 3.6 percent at 7,841.73, the NASDAQ closed down 64.86 points or 3.9 at 1,608.21 and the S&P 500 closed down 37.21 points or 4.3 percent at 832.39.
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