RTTNews - One day after snapping the losing streak that had reached more than 14 points or 1.3 percent, the Malaysian stock market turned right back to the downside again on Wednesday. The Kuala Lumpur Composite Index maintained support at 1,065 points, and now investors are expecting the market to hold steady around that level when the market kicks off trade on Thursday.
The global forecast for the Asian markets offers little guidance as investors wait for the corporate earning season to get more deeply under way after a modest start. Continued pressure on commodities also negates any bullish sentiment. The European markets finished sharply lower and the U.S. bourses ended fairly flat on either side of the unchanged line - and the Asian markets are tipped to follow the U.S. lead.
The KLCI finished barely lower on Wednesday, as gains among the financial stocks were wiped out by losses among the plantations and the industrial issues.
For the day, the index eased 0.89 points or 0.08 percent to close at 1,065.47 after trading between 1,058.12 and 1,066.36. Volume was 672.184 million shares worth 1.169 billion ringgit. There were 335 decliners and 188 gainers, with 228 stocks finishing unchanged.
Among the actives, Fareast, IJM, KNM Group, Talam Corp-RCPS, Sime Darby, Tenaga Nasional, Bumiputra-Commerce and IOI Corp all finished lower. Bucking the trend, Dutch Lady, DiGi.Com, British American Tobacco, Axiata and Maybank finished higher.
The lead from Wall Street is inconclusive as stocks swung between gains and losses over the course of the trading session on Wednesday, ending the day little changed after a modest upward move at the open. The major averages finished mixed after posting steep losses in the previous session. The lack of direction that was seen over the course of the trading day came as traders were reluctant to make any significant moves ahead of the start of the earnings season.
Shortly after the closing bell, Alcoa (AA) reported an adjusted second quarter loss of $256 million or $0.26 per share, while Wall Street expected the company to report a loss of $0.37 per share. The firm also said its quarterly revenues were $4.2 billion, edging out analyst estimates of $3.93 billion.
The release of quarterly results from Alcoa is seen as the unofficial start of the earnings season, as the aluminum producer is typically the first Dow component to reports its results. During the day, traders also digested earnings from Ruby Tuesday (RT), Pepsi Bottling Group (PBG) and Family Dollar (FDO) on the day.
Some of the day's selling pressure was mitigated by the results of the Treasury Department's $19.0 billion offering of ten-year notes. The sale drew a high-yield of 3.365 percent while attracting very strong demand, with the bid-to-cover ratio coming in at 3.28, the highest on record. The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
The major averages closed on opposite sides of the unchanged mark by slim margins, with the S&P 500 closing modestly lower despite a late-session rally. The Dow closed up by 14.81 points or 0.2 percent at 8,178.41 and the NASDAQ rose by 1 point or 0.1 percent to 1,747.17, while the S&P 500 fell 1.47 points or 0.2 percent to 879.56.
In economic news, Malaysia will on Thursday announce industrial production data for May, with forecasts calling for a decline of 11 percent on year after the 11.4 percent annual decline in April.
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