The Malaysia stock market on Wednesday ended the modest two-day winning streak in which it had collected more than a dozen points or 0.8 percent. The Kuala Lumpur Composite Index finished just below the 1,540-point plateau, and now traders are looking for a slight bounce when the market opens on Thursday.
The global forecast for the Asian markets suggests a mild rebound following the heavy losses in the previous session, thanks to reports from the European summit regarding the steps that the leaders are willing to take to boost economic growth. Some positive U.S. economic data adds to the sentiment, showing a bigger than expected increase in new home sales and also an increase in selling prices. The European markets were down and the U.S. bourses were mixed, and the Asian markets are tipped to open higher.
The KLCI finished modestly lower on Wednesday following losses from the financial shares, industrial issues and plantation stocks.
For the day, the index shed 7.13 points or 0.46 percent to finish at 1,539.71 after trading between 1,535.11 and 1,548.11. Volume was 960.848 million shares worth 1.288 billion ringgit. There were 437 decliners and 243 gainers, with 315 stocks finishing unchanged.
The lead from Wall Street is upbeat as stocks staged a significant recovery on Wednesday afternoon after moving sharply lower in the morning. Continued worries about the financial situation in Europe contributed to the early weakness, which came as European leaders held a closely watched summit in Brussels.
Traders were particularly worried about the potential impact of Greece leaving the eurozone after the debt-plagued nation's recent failure to form a government. However, the rebound by the markets was attributed to reports from the summit regarding the steps that the leaders are willing to take to boost economic growth.
Among the items under discussion, Italian Prime Minister Mario Monti and French President Francois Hollande have agreed to consider all possible measures to boost European growth, including euro zone bonds. In addition, German Chancellor Angela Merkel is advocating a eurozone-wide bank deposit guarantee.
Adding to the positive sentiment, the Commerce Department reported that new home sales rose 3.3 percent to an annual rate of 343,000 in April from the revised 332,000 in March. Economists had expected 335,000 from the 328,000 originally reported for March. In addition, the median sales price of new houses sold in April was $235,700, up 0.7 percent from $234,000 in March and up 4.9 percent from $224,700 a year ago.
Despite the recovery by the broader markets, Dell (DELL) continued to post a steep loss, with the PC giant tumbling 17.2 percent after reporting weaker than expected first quarter results and providing disappointing second quarter revenue guidance.
The major averages eventually ended the session mixed, with the Dow stuck just below the unchanged line. The Dow edged down 6.66 points or 0.1 percent to finish at 12,496.15, while the NASDAQ rose 11.04 points or 0.4 percent to end at 2,850.12 and the S&P 500 crept up 2.23 points or 0.2 percent to 1,318.86.
In economic news, Malaysia's gross domestic product increased 4.7 percent on an annual basis in the first quarter of 2012, Bank Negara Malaysia said on Wednesday, slower than the 5.2 percent growth in the fourth quarter. Economists expected 4.6 percent.
Public consumption expenditure increased 5.9 percent in the first quarter, slowing from fourth quarter's 22.9 percent gain. Investment climbed 16.1 percent annually during the three-month period, faster than the 8.4 percent rise in the previous quarter.
Malaysia's headline inflation slowed to 2.3 percent in the first quarter from 3.2 percent in the fourth quarter. In April, inflation eased to 1.69 from 2.1 percent in March, and came in below expectations.
Also, Malaysia's current account surplus dropped to MYR18.1 billion in the first quarter from MYR22.4 billion in the quarter ended December 2011, the Department of Statistics said on Wednesday.
The goods trade account showed a surplus of MYR35.8 billion, lower than the previous quarter's surplus of MYR36.8 billion. Meanwhile, the services account showed a deficit of MYR3.8 billion during the three-month period, almost unchanged from the balance in the fourth quarter.
by RTT Staff Writer
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