RTTNews - The Malaysian stock market has finished lower now in back-to-back sessions since ending the four-day winning streak in which it had gathered 20 points or 1.65 percent. The Kuala Lumpur Composite Index is clinging to support at 1,070 points, although investors are not sanguine about the market's chances of holding that line at the opening of trade on Thursday.
The global forecast for the Asian markets is flat with a touch of downside. Financials are expected to be in focus following the Obama administration's proposed financial system reforms. Technology shares may provide a bit of support, as might the commodities after some heavy selling in recent sessions. The European markets finished sharply lower and the American bourses ended virtually flat, and the Asian markets are projected to fall right in between with modest declines.
The KLCI finished slightly lower on Wednesday, as weakness among the financial stocks was largely offset by gains among the plantations and the industrial issues.
For the day, the index shed 3.22 points or 0.30 percent to close at 1,070.90 after trading between 1,069.74 and 1,083.59. Volume was 1.359.682 billion shares worth 1.338 billion ringgit. There were 367 gainers and 314 decliners, with 233 stocks finishing unchanged.
Among the gainers, SP Setia rose 1.40 percent and Maybank gained 0.90 percent, while Dataprep, Ramunia, PPB and British American Tobacco also ended higher. Finishing lower, Genting lost 4.30 percent and Tenaga was down 0.70 percent, while Scomi, KNM and Public Bank wound up in the red.
Wall Street offers little in the way of guidance with perhaps a slight negative bias as the major averages finishing on opposite sides of the unchanged line on Wednesday following two days of steep losses. The lack of conviction came amid low volume and mixed trader sentiment regarding near-term economic prospects and proposed financial system reforms from the Obama administration.
Seeking to prevent a recurrence of the financial meltdown that sunk the U.S. economy into a recession, President Barack Obama laid out a sweeping agenda for regulatory reform earlier this afternoon. The president proposed granting the Federal Reserve the authority to scrutinize firms that are large enough to pose a systemic risk to the financial markets.
In addition, Obama called for the creation of an oversight council of existing federal regulators to share information, identify gaps in regulation and tackle issues that don't fit neatly into an organizational chart. Obama also called for the creation of a new agency dedicated to looking out for the interests of consumers in the financial markets.
Earlier, traders digested a report on consumer prices from the Labor Department that showed a modest increase in the month of May, with the mild price growth coming in below the expectations of economists. The report showed that prices edged up 0.1 percent in May after coming in unchanged in April. Economists had been expecting a somewhat more substantial increase in prices of about 0.3 percent.
Core consumer prices, which exclude food and energy prices, also edged up 0.1 percent in May following a 0.3 percent increase in April. The modest increase in core prices came in line with economist estimates.
In other news, the Federal Reserve continued its treasury buyback program Wednesday, completing its second quantitative easing move of the week. The New York Federal Reserve purchased $7.0 billion worth of securities with maturity dates ranging from May of 2016 to May of 2019. The day's buyback saw a total of $26.2 billion in treasuries submitted for the purchase. Overall, the Fed has purchased a total of $169.97 billion since the program began on March 25th.
The major averages ended the session mixed, largely unable to hold onto their earlier gains. While the NASDAQ finished higher by 11.88 points or 0.7 percent at 1,808.06, the Dow slid 7.49 points or 0.1 percent to 8,497.18 and the S&P 500 dropped by 1.26 points or 0.1 percent to 910.71.
In economic news, Malaysia's consumer price index rose 2.4 percent year-on-year in May, after rising 3 percent in April, the Department of Statistics said on Wednesday. Economists expected an increase of 2.2 percent.
During the month, food and non-alcoholic beverage prices were up 5.2 percent, with prices of alcoholic beverages and tobacco rising 8.1 percent. At the same time, non-food prices climbed 1 percent, with services showing the highest price rise of 3.1 percent.
On a monthly basis, the consumer price index increased 0.2 percent in May, following a 0.2 percent fall in the preceding month.
In the first five months of the year, consumer prices climbed 3.3 percent compared with the corresponding period of the previous year.
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