The Malaysian stock market has seen its winning streak extended to three sessions, collecting more than 35 points or 4 percent in the process. With sentiment aided by a smooth transition in government power, the Kuala Lumpur Composite Index broke through resistance at 900 points, and now analysts are predicting more modest gains in Friday's trade.
On Thursday, Malaysian Prime minister Abdullah Ahmad Badawi tendered his resignation to the country's constitutional monarch before handing power to his deputy after more than five years of tenure. The King has given his consent for Deputy Prime Minister Najib Razak to be sworn-in as Malaysia's sixth Prime Minister on Friday. Najib was last Thursday officially declared president of the United Malays National Organization party, effectively clearing his path to the premiership because of its dominance of the political scene.
The KLCI finished sharply higher on Thursday, thanks to significant gains among the financial stocks and the plantations, while the industrial issues posted more modest increases.
For the day, the index added 20.89 points or 2.36 percent to close at 905.07 after trading between 890.07 and 907.85. Volume was 841.299 millions shares worth 1.208 billion ringgit. There were 476 gainers and 135 decliners, with 152 stocks finishing unchanged.
Among the gainers, CIMB surged 5.7 percent and IOI Corp jumped 4 percent, while KNM Group, Malaysian Resources, Resorts World, WCT, UEM Land, Sime Darby, Maybank, Tenaga and Bumiputra Commerce also finished higher.
The lead from Wall Street remains upbeat as stocks showed a strong upward move during trading on Thursday, as investors reacted well to mixed economic news and liked what they heard from the G-20 summit in London. The continued advance also reflected some optimism about stabilization in the economy.
Before the start of trading, the Labor Department said that initial jobless claims in the week ended March 28th unexpectedly rose to 669,000 from the previous week's revised figure of 657,000. With the increase, jobless claims rose to a new twenty-six year high.
Additionally, a report from the Commerce Department showing that factory orders rose 1.8 percent in February added to recent signs of stabilization in the economy, although the report also showed a notable downward revision to the data for January.
Meanwhile, traders were also keeping a close on the Group of 20 Summit in London, with the world leaders assembled at the meeting pledging to do whatever is necessary to end the economic crisis. President Barack Obama called the agreements reached by leaders a turning point in our pursuit of global economic recovery.
However, the president cautioned that while the reforms agreed to are necessary, they might not be sufficient. In order to ensure that a stable recovery takes hold, the G-20 will meet again in the fall, Obama announced. While noting that it is important that nations agree on an action plan, the president said individual actions remain just as important.
While the major averages gave back some ground going into the close, they still ended the session firmly positive. The Dow closed up 216.48 points or 2.8 percent at 7,978.08, the NASDAQ closed up 51.03 points or 3.3 percent at 1,602.63 and the S&P 500 closed up 23.30 points or 2.9 percent at 834.38. With the gains, the Dow and the S&P 500 ended the session at their best closing levels in nearly two months, while the tech-heavy Nasdaq set a nearly three-month closing high.
In economic news, Malaysia is scheduled to release February numbers for imports, exports and trade balance on Friday. Imports are expected to decline 28 percent on year following the 32 percent annual fall in January. Exports are forecast to fall 25 percent on year after the 27.8 decline in the previous month. The trade balance is expected to reflect a surplus of 8.5 billion ringgit.
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