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Rally May Stall For Malaysia Stock Market

The Malaysia stock market has closed higher now in four straight sessions, rising more than a dozen points or 0.7 percent along the way. The Kuala Lumpur Composite Index finished just above the 1,600-point plateau, although now analysts are forecasting a round of profit taking at the opening of trade on Monday.

The global forecast for the Asian markets suggests consolidation, with investors likely locking in gains after rallying on Friday. Concerns from Europe's financial sector add to the cautious sentiment after data showed that Spanish banks stepped up their borrowings from the European Central Bank in March. The European and U.S. markets finished lower, and the Asian bourses are tipped to follow that lead.

The KLCI finished barely higher on Friday as gains from the financial shares and industrial issues were dented by losses from the plantation stocks.

For the day, the index collected 1.85 points or 0.12 percent to finish at 1,603.12 after trading between 1,600.75 and 1,604.71. Volume was 1.348 billion shares worth 1.656 billion ringgit. There were 400 gainers and 325 decliners, with 355 stocks finishing unchanged.

Among the actives, Tenaga Nasional, Sime Darby, Petronas Chemicals, Sam Engineering & Equipment and Hibiscus Petroleum all finished higher, while Maybank was unchanged and CIMB Group ended lower.

The lead from Wall Street is negative as stocks moved sharply lower on Friday, giving back some ground after posting strong gains in the two previous sessions. Renewed concerns about corporate earnings and the global economy contributed to the weakness in the markets.

The pullback was partly due to disappointing economic news out of China, the world's second largest economy behind the U.S. Data released by the Chinese National Bureau of Statistics showed that Chinese economic growth slowed to 8.1 percent in the first quarter from 8.6 percent in the fourth quarter. Economists had expected a more modest slowdown to 8.4 percent.

Traders also reacted negatively to quarterly results from JP Morgan (JPM) and Wells Fargo (WFC), which closed notably lower despite reporting better than expected first quarter earnings.

Additional negative sentiment followed a report from Reuters and the University of Michigan showing an unexpected deterioration in U.S. consumer sentiment in April. The preliminary reading on consumer sentiment in April fell to 75.7 compared to March's final reading of 76.2. Economists had expected the index to come in unchanged on month. A separate report from the Labor Department showed an increase in consumer prices in March that matched economic estimates.

The major averages saw further downside going into the close, ending the session near their worst levels of the day. The Dow slid 136.99 points or 1.1 percent to finish at 12,849.59, while the NASDAQ tumbled 44.22 points or 1.5 percent to end at 3,011.33 and the S&P 500 fell 17.31 points or 1.3 percent to 1,370.26. With the losses on the day and the sell-off earlier in the week, the major averages all posted weekly losses. The Dow fell by 1.6 percent, while the NASDAQ and the S&P 500 dropped by 2.2 percent and 2 percent, respectively.

by RTT Staff Writer

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