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Malaysia Stocks May Tick Slightly Higher On Wednesday

Ahead of Tuesday's Labor Day holiday, the Malaysia stock market has finished higher in two of three trading days since the end of the five-day slide in which it had retreated more than 20 points or 1.3 percent. The Kuala Lumpur Composite Index settled just above the 1,570-point plateau, and now traders are anticipating continued support when the market opens on Wednesday.

The global forecast for the Asian markets is upbeat, thanks to some better than expected data from the U.S. manufacturing sector as the Institute for Supply Management reported that activity in the U.S. manufacturing sector unexpectedly expanded. Technology stocks figure to fuel the rally, along with properties, financials and oil companies. The European and U.S. markets finished higher and the Asian bourses are expected to follow suit.

The KLCI finished slightly higher on Monday as gains from the financial shares and plantation stocks were limited by losses from the industrial issues.

For the day, the index added 2.81 points or 0.18 percent to finish at 1,570.61 after trading between 1,568.58 and 1,574.49. Volume was 945.418 million shares worth 1.381 billion ringgit. There were 388 decliners and 297 gainers, with 318 stocks finishing unchanged.

Among the actives, Maybank, Petronas Chemical, Ariantec Global and Metronic Global all finished lower, while Sime Darby, CIMB Group and Maxis all ended higher.

The lead from Wall Street is positive as stocks finished higher on Tuesday, although they receded from their highs earlier in the day. Despite the pullback in the latter part of the day, the Dow still finished the session at its best closing level in over four years.

The rally followed a report from the Institute for Supply Management showing that activity in the U.S. manufacturing sector unexpectedly jumped. The ISM's purchasing managers' index climbed to 54.8 in April from 53.4 in March, marking its highest level since 55.8 in June 2011. A reading above 50 indicates an expansion in activity. Economists had a reading of 53.0.

Meanwhile, the Commerce Department reported that construction spending edged up by 0.1 percent in March compared to expectations for a 0.5 percent increase. An increase in private construction spending was largely offset by a drop in spending on public construction.

Among individual stocks, shares of PLX Technology (PLXT) surged 67.3 percent after the company agreed to be acquired by Integrated Device Technology (IDT) in a transaction valued at $330 million. Agriculture giant Archer Daniels Midland (ADM) also posted a strong gain after reporting fiscal third quarter earnings that fell year-over-year but still beat estimates.

The major U.S. averages pulled back from their highs on Tuesday but still finished higher. The Dow rose 65.69 points or 0.5 percent to finish at 13,279.32, while the NASDAQ edged up 4.08 points or 0.1 percent to end at 3,050.44 and the S&P 500 climbed 7.91 points or 0.6 percent to 1,405.82.

by RTT Staff Writer

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