The Malaysia stock market has risen higher now in five straight sessions, gathering almost 35 points or 2.3 percent in that span. The Kuala Lumpur Composite Index finished just above the 1,575-point plateau, and now investors figure to lock in gains when the market kicks off trade on Thursday.
The global forecast for the Asian markets is broadly negative as the situation in Europe continues to deteriorate, with rising Italian and Spanish bond yields suggesting the possibility that the European debt crisis will continue to spread. Soft economic data from the United States adds to the negative sentiment. The European and U.S. markets finished firmly in the red, and the Asian bourses are expected to open in similar fashion.
The KLCI finished modestly higher on Wednesday, bucking the regional trend of decline on support from the financial shares, industrial issues and plantation stocks.
For the day, the index added 9.85 points or 0.63 percent to finish at 1,575.17 after trading between 1,564.6 and 1,578.28. Volume was 920.86 million shares worth 1.25 billion ringgit. There were 378 gainers and 331 decliners, with 318 stocks finishing unchanged.
Among the gainers, Maybank, Sime Darby, Petronas Chemicals, CIMB Group, Naim Indah, Metronic Global, British American Tobacco and Genting Plantations all finished higher.
The lead from Wall Street suggests consolidation as stocks showed a substantial move back to the downside on Wednesday after turning in a strong performance in the previous session.
Renewed concerns about the financial situation in Europe contributed to the sharp pullback by the markets. Reports suggested that the European Central Bank had blatantly rejected Spain's plan to recapitalize the troubled lender Bankia using sovereign bonds - although the ECB later denied the report.
Also, an auction of 5 and 10-year Italian debt failed to meet the maximum target and the 10-year borrowing costs breached the 6 percent mark amid rising fears of a contagion from the worsening Spanish banking crisis.
Additionally, a new poll out of Greece showing the anti-bailout Syriza party in the lead in next month's elections also led to renewed concerns about the outlook for the debt-plagued nation.
Disappointing U.S. economic data also weighed, as the National Association of Realtors reported that pending home sales tumbled 5.5 percent to 95.5 in April after rising 3.8 percent to a downwardly revised 101.1 in March. Economists had expected pending home sales to edge up by 0.5 percent.
Among individual stocks, Pep Boys (PBY) posted a substantial loss after the auto parts retailer announced the termination of its proposed merger with Gores Group. BlackBerry maker Research in Motion also came under pressure after saying it now expects to report an operating loss for its first quarter.
The major averages posted steep losses on the day, offsetting Tuesday's gains as the Dow fell 160.83 points or 1.3 percent to finish at 12,419.86, while the NASDAQ dropped 33.63 points or 1.2 percent to end at 2,837.36 and the S&P 500 slid 19.10 points or 1.4 percent to 1,313.32.
by RTT Staff Writer
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