RTTNews - One day after ending the five-day winning streak in which it had collected more than 75 points or 6.5 percent, the Malaysian stock market turned right back to the upside again on Wednesday. The Kuala Lumpur Composite Index is closing on resistance at 1,150 points, although investors are bracing for a mild easing by the opening of trade on Thursday.
The global forecast for the Asian markets is a study in contrasts as expected strength in the technology sectors is likely to be offset by falling oil stocks reacting to a decline in the price of oil. The day's corporate earnings results are also unlikely to spark momentum. The European and U.S. markets finished in mixed fashion but did not stray too far from the unchanged line in either direction - and the Asian markets are expected to show little movement with perhaps a slight downside bias.
The KLCI finished sharply higher on Wednesday, fueled by solid gains among the plantation stocks and the financials, while the industrial issues finished with more modest gains.
For the day, the index jumped 14.00 points or 1.23 percent to close at 1,148.70 after trading between 1,134.70 and 1,160.61. Volume was 1.111 billion shares worth 1.842 billion ringgit. There were 327 gainers and 290 decliners, with 258 stocks finishing unchanged.
Among the actives, Gula Perak, PJI Holdings and Sime Darby all finished higher, while Maybank, Tenaga and KNM were unchanged and Telekom ended slightly lower.
Wall Street offers an inconsistent lead as stocks finished on a mixed note after choppy trade throughout Wednesday's session, reacting to the latest earnings results with low volume. The major averages closed on opposite sides of the unchanged mark, largely unable to extend their recent run-up.
Earlier this morning, traders delved into quarterly results from a number of big-name companies including Apple (AAPL), Yahoo! (YHOO), Pfizer (PFE) Boeing (BA), Morgan Stanley (MS), Wells Fargo (WFC), and PepsiCo (PEP). The reports saw mixed reaction, however, as most firms met or beat estimates by cost cutting rather than through revenue growth.
In other news, Federal Reserve Chairman Ben Bernanke redelivered his address regarding monetary policy before the Senate Banking Committee while also fielding questions regarding the current and near-term economic outlook. In his prepared remarks, Bernanke reiterated that the U.S. economy is showing signs of stabilization, although he noted that the economy is still in a fragile state, with unemployment high and consumer spending shaky.
Questioning the Fed chief, Sen. Chris Dodd, D-Conn., the chairman of the Senate Banking Committee, noted that while some signs of economic recovery have been seen on Wall Street, the benefits have yet to make it to Main Street.
Bernanke conceded that unemployment is the most pressing issue facing the Fed, but he noted that there are steps that Congress could take to ease the situation, similar to the already-passed extension of unemployment benefits. He said one serious concern was that the long-term unemployed might see their job skills atrophy, leaving them unqualified for work once the economy recovers. Extending job training programs might be one response Congress should consider, the Fed chief said.
The major averages moved sideways in late session dealing to cap off a lackluster trading day. While the NASDAQ eked out a gain of 10.18 points or 0.5 percent, finishing at 1,926.38, the Dow fell by 34.68 points or 0.4 percent to 8,881.26. Further, the S&P 500 slipped by 0.51 points or 0.1 percent to close at 954.07.
In economic news, Malaysia's consumer price index dropped 1.4 percent year-on-year in June, the Department of Statistics said on Wednesday, in line with economists' expectations. The decline was mainly due to changes in petrol and diesel prices starting from June 2008, reflecting an 18 percent drop in transport prices, the statistical office said. Consumer prices rose 0.1 percent on month in June. For the first six months of the year, consumer prices were up 2.5 percent from last year.
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