The Malaysia stock market has moved higher now in two straight sessions, gathering more than 8 points or 0.5 percent in the process. The Kuala Lumpur Composite Index finished just below the 1,630-point plateau, and now investors are anticipating additional support when the market opens on Tuesday.
The global forecast for the Asian markets is mixed to higher following continued positive momentum from Europe - although the upside may be capped by profit-taking after several days of rallies. Italy and Spain saw their borrowing costs ease on Monday as investor confidence improved on hopes of some crucial action from the European Central Bank. The European markets were sharply higher and the U.S. bourses were mixed but little changed - and the Asian markets figure to split the difference.
The KLCI finished modestly higher on Monday following gains from the financial shares, industrial issues and plantation stocks.
For the day, the index gained 7.41 points or 0.46 percent to finish at 1,632.35 after trading between 1,623.26 and 1,632.35. Volume was 1.229 billion shares worth 1.285 billion ringgit. There were 426 gainers and 305 decliners, with 334 stocks finishing unchanged.
Among the actives, Petronas Gas, Hong Leong Bank, CIMB Group, Maybank, Sime Darby and Petronas Chemicals all finished higher, while BAT, Nestle and Far East Holdings ended lower.
The lead from Wall Street provides little clarity as stocks finished a choppy session with mild losses. With traders looking ahead to key information due out later in the week, the market was unable to find significant momentum.
Traders resisted the temptation to take profits after the recent run-up, as hope remains for a solution for the euro-zone debt crisis or for signs of additional stimulus from the Federal Reserve. Stocks saw some modest gains by the mid-morning, but a mid-day slide reversed that advance, however, and shares held below the flat line through much of the rest of the day.
German Chancellor Angela Merkel and Italian Prime Minister Mario Monti again vowed to defend the euro during a phone conversation on Sunday. They also stated that the decisions made at the EU summit last month must be implemented as quickly as possible.
Italy and Spain saw their borrowing costs ease on Monday on hopes of action from the European Central Bank, which holds its rate-setting session later this week. The yield on the 10-year Italian bond dropped to 5.96 percent from 6.19 percent on June 28. The 5-year debt fetched a yield of 5.29 percent, down from 5.84 percent at the previous sale on June 28. Spanish 10-year bond yield fell to 6.59 percent in the secondary market.
On the corporate front, CB&I (CBI) has reached a definitive merger deal to acquire Shaw Group (SHAW) for around $3 billion. The company will pay $46 per share in a cash and stock transaction. CB&I dropped $5.76, or 14.2 percent, to close at $34.94.
The Dow Jones Industrial Average slipped 2.65 points, or less than 0.1 percent, to close at 13,073.01. The gains last week allowed the Dow to push back above the 13,000 mark. The S&P 500 dipped less than a point to close at 1,385.30. The NASDAQ was the worst performer among the major averages. It slipped 12.25 points, or 0.41 percent, to close at 2,945.84.
by RTT Staff Writer
For comments and feedback: editorial@rttnews.com
Market Analysis