The Malaysia stock market has finished lower now in three straight trading days, giving away more than 25 points or 2.2 percent along the way. The Kuala Lumpur Composite Index settled just above the 1,560-point plateau, and now traders are bracing for further damage when the market kicks off trade on Wednesday.
The global forecast for the Asian markets is negative due to the political situation in Greece, which is headed for a new round of elections after lawmakers failed to form a coalition government. In addition, rating agency Moody's Investors Service has downgraded 26 Italian banks, calling them now amongst the lowest in advanced European countries. However, the downside may be limited by some upbeat U.S. economic data. The European and U.S. markets finished firmly in the red, and the Asian bourses are expected to follow that lead.
The KLCI finished modestly lower on Tuesday following losses from the financial shares, industrial issues and plantation stocks.
For the day, the index gave away 14.01 points or 0.89 percent to finish at 1,561.07 after trading between 1,559.01 and 1,571.24. Volume was 1.12 billion shares worth 1.64 billion ringgit. There were 658 decliners and 176 gainers, with 250 stocks finishing unchanged.
Among the actives, Maybank, Sime Darby, CIMB Group, Dutch Lady, Shell Refining, Astral and Ariantec Global all finished lower, while Naim Indah, BAT and YTL Power International moved higher.
The lead from Wall Street continues to suggest consolidation as stocks came under pressure in the latter part of the trading day on Tuesday, after showing a lack of direction for much of the session. With the losses, the major averages again ended at their worst closing levels in over three months.
The selling pressure followed continued uncertainty about the political situation in Greece, which is headed for a new round of elections after lawmakers failed to form a coalition government. The new elections are seen as referendum on whether Greece should remain a member of the Eurozone, adding to the recent worries about the outlook for Europe.
However, some upbeat U.S. economic data helped to limit the downside. The National Association of Home Builders reported that homebuilder confidence reached a five-year high in May. The NAHB/Wells Fargo Housing Market Index jumped to 29 in May from a downwardly revised 24 in April. Economists had expected the index to edge up to 26 from the 25 originally reported for the previous month.
A separate report from the New York Federal Reserve showed a much faster than expected expansion in New York manufacturing activity. The New York Fed said its general business conditions index jumped to 17.1 in May from 6.6 in April, with a positive reading indicating an increase in regional manufacturing activity. Economists had expected the index to show a more modest increase to a reading of 10.0.
Additionally, the Commerce Department said retail sales edged up by 0.1 percent in April following a revised 0.7 percent increase in March - matching forecasts. Core sales, which exclude gas, autos, and building materials, rose by 0.4 percent in April, exceeding estimates for a 0.3 percent increase.
Among individual stocks, shares of Home Depot (HD) fell by 2.4 percent after the home improvement retail giant reported first quarter earnings that beat estimates but on weaker than expected sales. Avon Products (AVP) also came under pressure after Coty Inc. withdrew its $10.7 billion offer to acquire the cosmetics company.
The major averages moved roughly sideways going into the close, stuck firmly in negative territory. The Dow fell 63.35 points or 0.5 percent to finish at 12,632.00, while the NASDAQ slipped 8.82 points or 0.3 percent to end at 2,893.76 and the S&P 500 dropped 7.69 points or 0.6 percent to 1,330.66.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.