Market Commentary and Intraday News

Malaysia Stock Market Poised To Extend Gains

240 days ago

(RTTNews) - The Malaysia stock market has closed higher now in three consecutive trading days, climbing more than 15 points or 0.95 percent in that span. The Kuala Lumpur Composite Index closed just above the 1,625-point plateau, and now investors are looking for continued support at the opening of trade on Friday.

The global forecast for the Asian markets is positive following better than expected jobless data out of the United States, as well as optimism over the release of Spain's budget. In the U.S., the Labor Department reported a much bigger than expected drop in weekly jobless claims, falling to a 10-week low. Further buying interest may be generated by the unveiling of Spain's budget for 2013, which seeks to balance the country's deficit by focusing on spending cuts rather than tax increases. The European and U.S. markets were higher and the Asian bourses are tipped to follow suit.

The KLCI finished modestly higher on Thursday as gains from the financial sector were offset by weakness from the plantation stocks and the industrial issues.

For the day, the index added 8.54 points or 0.53 percent to finish at 1,627.84 after trading between 1,620.53 and 1,631.67. Volume was 731.340 million shares worth 1.384 billion ringgit. There were 363 gainers and 303 decliners, with 322 stocks finishing unchanged.

Among the actives, RHB Capital added 0.70 percent, while Maybank jumped 78 percent, Sime Darby was up 0.10 percent, AirAsia spiked 3.51 percent, Tenaga Nasional climbed 1.19 percent, Digi.com spiked 3.32 percent, Maxis climbed 0.88 percent, CIMB Group shed 0.81 percent and IOI Corporation eased 0.20 percent.

The lead from Wall Street is upbeat as stocks moved higher on Thursday after falling in recent sessions. The markets benefited from a positive reaction to the latest developments overseas as well as some upbeat U.S. jobs data.

The strength was also partly due to optimism about the possibility of further stimulus from China, with reports suggesting that the China Securities Regulatory Commission will take steps to prop up the domestic equity market. The rumors out of China contributed to a late-day rally by the Shanghai Composite Index, which surged 2.6 percent on the day.

Further buying interest was generated by the unveiling of Spain's budget for 2013, which seeks to balance the country's deficit by focusing on spending cuts rather than tax increases. The controversial budget sparked massive protests earlier in the week but is designed to pre-empt tougher conditions as part of a potential international bailout.

On the U.S. economic front, the Labor Department reported that jobless claims fell to 359,000 in the week ended September 22 from the previous week's revised figure of 385,000. Economists had expected claims to drop to 376,000 from the 382,000 originally reported for the previous week. With the decline, jobless claims fell to their lowest level since July 21.

Meanwhile, the Commerce Department released a pair of disappointing reports on durable goods orders and Q2 GDP. Durable goods orders plummeted by 13.2 percent in August amid a sharp drop in orders for transportation equipment, while GDP grew by less than previously estimated in the second quarter.

Traders mostly focused on the upbeat jobs data, however, as the reports from the Commerce Department were seen as largely backward-looking in light of the Federal Reserve's recent decision to enact a third round of quantitative easing.

The major U.S. averages were firmly positive as the Dow rose 72.46 points or 0.5 percent to finish at 13,485.97, while the NASDAQ jumped 42.90 points or 1.4 percent to end at 3,136.60 and the S&P 500 climbed 13.83 points or 1 percent to close at 1,447.15.

In economic news, Malaysia will on Friday provide producer price data for August; in July, PPI was up 0.5 percent on month but down 0.2 percent on year.

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