RTTNews - The three-day winning streak for the Malaysian stock market came to an end on Tuesday, after it had collected more than 18 points or 1.6 percent in the process. The Kuala Lumpur Composite Index remained above the 1,170-point plateau, and now investors are looking for the market to turn back to the upside when it kicks off trade on Wednesday.
The Asian markets are dealt a cautiously optimistic lead from the global forecast after most stocks in the region finished lower in the previous session. Airlines and housing stocks are expected to support the markets, while the financials, properties and gold miners also are predicted to rebound - but oil stocks may fall under pressure on the declining price of crude oil. The European and U.S. markets finished with mild gains and the Asian bourse are also tipped to move modestly to the upside.
The KLCI finished slightly lower on Tuesday, as slim gains in the financial sector cut into mild declines among the plantation and industrial stocks.
For the day, the index eased 3.40 points or 0.28 percent to close at 1,171.09 after trading between 1,168.95 and 1,174.74. Volume was 709.248 million shares worth 985.757 million ringgit. There were 356 decliners and 273 gainers, with 233 stocks finishing unchanged.
Among the actives, TM, British American Tobacco, Cepco, Tanjong, Sime Darby, IOI Corp and Axiata all finished lower, while Maybank, MSports and KNM all remained flat and KTB, Bumiputera-Commerce, Tenaga Nasional and RHB Cap saw modest gains.
The lead from Wall Street is mildly positive as stocks finished modestly higher on Tuesday, as the day's positive economic reports and news of Ben Bernanke's reappointment generated some upbeat sentiment on Wall Street. The major averages all finished in positive territory by slim margins, well off their best levels of the day.
Buying interest was largely sparked by the day's economic data, with a report from the Conference Board showing that consumer confidence rebounded significantly in the month of August after seeing some deterioration in July. The consumer confidence index jumped to 54.1 in August from an upwardly revised 47.4 in July. Economists had been expecting the index to increase to 47.9 from the 46.6 originally reported for the previous month.
Separately, Standard and Poor's revealed that the S&P/Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 15.4 percent in June compared to a revised 17 percent drop in May. Economists had expected prices to fall 16.4 percent compared to the same month a year ago.
In other news, President Barack Obama officially nominated Ben Bernanke for a second term as Federal Reserve Chairman this morning, with the president praising the manner in which the Fed Chief handled the recent financial crisis.
Meanwhile, both the White House and the Congressional Budget Office released new projections of near-record budget deficits totaling roughly $1.58 trillion for 2009. That level of deficit, a combination of increased government spending and plummeting tax revenues due to the recession, will ring in at 11.2 percent of the country's gross domestic product, the highest deficit since World War II, according to both analyses.
The major averages saw choppy movement in late session trading, holding onto modest gains. The Dow closed up 30.01 points or 0.3 percent at 9,539.29, the NASDAQ closed up 6.25 points or 0.3 percent at 2,024.23 and the S&P 500 closed up 2.43 points or 0.2 percent at 1,028.00.
In economic news, Malaysia will on Wednesday afternoon announce Q2 data for gross domestic product, with analysts calling for a contraction of 5.1 percent on year following the 6.2 percent annual decline in the previous three months.
Also, Malaysia's central bank on Tuesday left its key interest rate unchanged at 2 percent for the fourth straight rate-setting session saying that domestic economic conditions are stabilizing in line with international developments. The decision matched economists' expectations.
The central bank said it expects the domestic economy to improve in the second half of 2009 and into 2010, following a recovery in domestic demand amidst stabilization of the global economy. Moreover, the bank said the negative inflation is expected to be temporary and is projected to turn positive as domestic conditions strengthen.
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