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Malaysia Stocks: Resistance At 1,600 Points

4/8/2012 8:00 PM ET

The Malaysian stock market on Friday halted the two-day losing streak in which it had fallen more than a dozen points or 0.8 percent. The Kuala Lumpur Composite Index finished just below the 1,600 point plateau, and now investors are bracing for renewed consolidation when the market opens on Monday.

The global forecast for the Asian markets is fairly light on leads, since the major European and U.S. markets were closed for Good Friday. However, analysts are looking for selling pressure on Monday after U.S. employment data failed to meet expectations.

The KLCI finished slightly higher on Friday following gains from the plantation stocks and technology shares.

For the day, the index added 5.43 points or 0.34 percent to finish at 1,598.87 after trading between 1,594.07 and 1,600.60.

Among the gainers, Smartag Solutions jumped 2.3 percent, while Gopeng spiked 9.7 percent, Ebwork collected 1.1 percent, OSK Ventures International gathered 2.5 percent and Favelle Favco climbed 2.9 percent.

There is no lead from Wall Street or Europe, although the Asian markets are still looking at some negative momentum after the Labor Department reported on Friday that U.S. employment saw continued growth in March, although the pace of job growth came in well below estimates.

Non-farm payroll employment increased by 120,000 jobs in March following an upwardly revised increase of 240,000 jobs in February. Economists had expected the addition of about 201,000 jobs compared to the increase of 227,000 jobs that had been reported for the previous month.

The continued job growth was partly due to notable increases in employment in the leisure and hospitality and manufacturing sectors, which added 39,000 jobs and 37,000 jobs, respectively.

Despite the weaker than expected job growth, the unemployment rate unexpectedly edged down to 8.2 percent in March from 8.3 percent in February. With the unexpected drop, the unemployment rate fell to its lowest level since coming in at 7.8 percent in January of 2009.

Also, the Bank of England kept the size of its bond purchases unchanged, as concerns about a technical recession ease and inflation remains sticky due to elevated oil prices. The nine-member Monetary Policy Committee decided to leave the quantitative easing unchanged at GBP 325 billion. Also, the committee retained the benchmark interest rate at its record low level of 0.50 percent.

by RTT Staff Writer

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