Market Commentary and Intraday News

Malaysia Shares May Extend Losses On Thursday

250 days ago

(RTTNews) - The Malaysia stock market turned lower again on Wednesday, one session after it had halted the two-day slide in which it had fallen just a single point or 0.07 percent. The Kuala Lumpur Composite Index finished just below the 1,660-point plateau, and now analysts are forecasting further damage at the opening of trade on Thursday.

The global forecast for the Asian markets continues to suggest consolidation thanks to continuing concerns over the situation in Europe. The downside may be capped, however, by bargain hunting following heavy losses on Wednesday. Also, the International Monetary Fund warned that banks in Europe may need to sell as much as $4.5 trillion in assets in 2013, in the absence of decisive and urgent policy measures. The European and U.S. markets finished lower and the Asian bourses figure to open in similar fashion.

The KLCI finished slightly lower on Wednesday as gains from the financial shares and plantation stocks were capped by weakness from the property sector and the energy producers.

For the day, the index lost 3.92 points or 0.24 percent to finish at 1,659.40 after trading between 1,657.19 and 1,661.59. Volume was 912.5 million shares worth 1.41 billion ringgit. There were 380 decliners and 302 gainers, with 345 stocks finishing unchanged.

Among the actives, Sime Darby shed 0.61 percent, YTL Power plunged 1.22 percent, Axiata lost 0.30 percent and UEM Land Holdings plummeted 3.80 percent, while Maybank was flat, RHB Capital jumped 1.38 percent, Hong Leong Financial added 0.16 percent, Public Bank collected 0.27 percent and IOI Corporation gained 0.20 percent.

The lead from Wall Street remains negative as stocks were down on Wednesday, with traders expressing continued concerns about the outlook for the global economy. The losses extended a recent downward move for the markets, with the major averages falling to their lowest levels in about a month.

The weakness was partly a negative reaction to earnings news from aluminum giant Alcoa, which kicked off the earnings season after the close of trading on Tuesday. While Alcoa reported Q2 results that beat estimates, it also lowered its forecast for global aluminum demand growth in 2012 to 6 percent from 7 percent. The lower guidance led to worries of disappointing forecasts from other companies.

Adding to the negative sentiment, oil giant Chevron warned that it expects its Q3 earnings to be substantially lower than in the second quarter. Chevron said it expects upstream earnings to be hurt by foreign exchange losses and lower liftings and realizations.

Meanwhile, traders largely shrugged off the Federal Reserve's Beige Book, which said economic activity expanded modestly since the last report. Consumer spending was called flat to up slightly, but also noted improvement in residential real estate conditions. Conditions in the manufacturing sector were described as mixed but were said to have improved somewhat from the previous report.

The major U.S. averages were firmly lower on Wednesday as the Dow plunged 128.56 points or 1 percent to finish at 13,344.97, while the NASDAQ fell 13.24 points or 0.4 percent to end at 3,051.78 and the S&P 500 slid 8.92 points or 0.6 percent to close at 1,432.56.

In economic news, Malaysia will on Thursday release August figures for industrial production and manufacturing production. Industrial output is expected to be flat on month and dip 1 percent on year after shedding 4.7 percent on month and rising 1.4 percent on year in July. Manufacturing production was down 3.4 percent on month and up 5.5 percent on year in July.

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