RTTNews - One day after ending the modest two-day winning streak in which it had gathered two points or 0.16 percent, the Malaysian stock market turned right back to the upside again on Tuesday. The Kuala Lumpur Composite Index is knocking at the door to resistance at 1,080 points, and now investors are looking for further gains at the opening of trade on Wednesday.
The global forecast for the Asian markets is mildly positive, following some modestly optimistic economic and corporate news out of the United States and Europe. Financials and commodities are tipped to lead the move, although lagging crude oil prices may continue to weigh. The European markets finished sharply higher, while the U.S. bourses ended with more modest gains - and the Asian markets are also forecast to move higher.
The KLCI finished sharply higher on Tuesday, thanks to major gains in the financial sector. Plantations also saw significant increases, while the industrial sector ended slightly above the unchanged line.
For the day, the index surged 15.97 points or 1.50 percent to close at 1,079.63 after trading between 1,063.66 and 1,082.81. Volume was 788.982 million shares worth 1.106 billion ringgit. There were 500 gainers and 128 decliners, with 156 stocks finishing unchanged.
Among the gainers, Bumiputra-Commerce, Public Bank, Hong Leong Financial Group, Frontken Corporation, EP Manufacturing, Glomac, Sunway Holdings, Kulim, Maybank and Tenaga all finished in positive territory.
The lead from Wall Street is cautiously optimistic as stocks were unable to sustain any clear direction for the majority of the Tuesday's session following an influx of earnings and economic figures, but some late buying interest helped the markets to a positive finish. The major averages all finished in the green by moderate margins, extending their gains for a second straight session.
On the economic front, a report released by the Commerce Department revealed that retail sales increased by a little more than expected in the month of June, although the sales growth was due in large part to higher gasoline prices. The report showed that retail sales rose 0.6 percent in June following an unrevised 0.5 percent increase in May. Economists had been expecting retail sales to increase by a somewhat more modest 0.4 percent. However, after excluding increases in gas station and motor vehicle and parts sales, retail sales actually fell 0.2 percent for the month.
In a separate report, the U.S. Labor Department revealed that producer prices, a key measure of wholesale inflation, rose 1.8 percent in June. This followed a 0.2 percent increase in the previous month. Core producer prices, which exclude food and energy prices, climbed 0.5 percent.
On the earnings front, traders largely shrugged off better than expected earnings from Goldman Sachs (GS), with some suggesting that the news was already priced in following the rally among financial stocks that was seen on Monday. Johnson & Johnson (JNJ) also beat earnings expectations but saw subdued reaction amid the day's low trading volume.
The major averages saw modest upside in late day trading and were able to creep into positive territory. The Dow closed up by 27.81 points or 0.3 percent at 8,359.49, the NASDAQ advanced by 6.52 points or 0.4 percent to 1,799.73 and the S&P 500 rose by 4.79 or 0.5 percent to 905.84.
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