RTTNews - The Malaysian stock market headed right back up into positive territory again on Wednesday, one day after witnessing an end to the three-day winning streak in which it had collected more than 18 points or 1.6 percent. The Kuala Lumpur Composite Index remained above the 1,170-point plateau, although now analysts are predicting that the market could open under a bit of pressure on Thursday.
The global forecast for the Asian markets is mixed with a touch of downside, but they are not expected to show much movement. Housing, technology and airline stocks could see solid gains, but they're likely to be countered by selling among the railroad stocks and the commodities. European markets ended firmly in negative territory, while the U.S. markets ended barely above the unchanged line - and the Asian markets are projected to trade slightly to the downside.
The KLCI finished barely higher on Wednesday, as mild gains among the financial stocks and the industrial issues were pared by selling in the plantation sector.
For the day, the index ticked higher by 1.47 points or 0.13 percent to close at the daily high of 1,172.56 after dipping as low as 1,167.77. Volume was 636.267 million shares worth 930.776 million ringgit. There were 363 decliners and 259 gainers, with 241 stocks finishing unchanged.
Among the actives, Maybank, DiGi, Huatlai and Petra all finished lower, while Bumiputera-Commerce was unchanged and Oilcorp, Kurasia, KNM, Nestle, LaFarge Cement, Tomei, Sime Darby, Tenaga Nasional and Genting all posted modest gains.
Wall Street offers not much in the way of guidance as stocks finished Wednesday's session little changed, with the day's trading marred by choppy movement despite largely positive news on the economic front. The major averages closed only slightly higher after turning in another lackluster trading session. Some traders remained on the sidelines ahead of the Thursday's weekly jobless claims report, which is expected to show a modest decrease in first-time claims for unemployment benefits.
Some of the day's early upside came on the heels of data on new home sales, which increased by much more than expected in the month of July, according to a report released by the Commerce Department. The report showed that new home sales surged up by 9.6 percent to an annual rate of 433,000 in July from the revised June rate of 395,000. Economists had been expecting sales to edge up to 390,000 from the 384,000 originally reported for the previous month.
Some positive sentiment was also generated by a report from the Commerce Department showing a much bigger than expected increase in durable goods orders in the month of July, with the growth largely due to a substantial rebound in orders for transportation equipment. The report showed that new orders for durable goods jumped 4.9 percent in July following a revised 1.3 percent decrease in June. Economists had expected orders to increase by 3.2 percent compared to the 2.2 percent decrease that had been reported for the previous month.
Excluding an 18.4 percent increase in orders for transportation equipment, durable goods orders increased by a much more modest 0.8 percent in July compared to a 2.5 percent increase in June. The increase came in below economist estimates of 1.0 percent growth.
In other news, Atlanta Federal Reserve Bank President Dennis Lockhart said earlier today that although he believes the worst of the economic downturn has passed, the economic recovery will be slow and will contribute to a protracted period of high unemployment.
The major averages showed a slight upward move going into the close, ending the day just above the unchanged line. The Dow closed up by 4.23 points at 9,543.52, the NASDAQ gained 0.20 points to finish at 2024.43 and the S&P 500 rose by 0.12 to 1,028.12.
In economic news, the Department of Statistics said on Wednesday that the gross domestic product decreased 3.9 percent year-on-year in the second quarter, compared with a 6.2 percent fall in the previous quarter. Economists expected the GDP to fall 5 percent. For the first half of the year, the GDP dropped 5 percent compared to the same period of the previous year.
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