The Malaysia stock market on Wednesday halted the two-day slide in which it had eased almost 4 points or 0.25 percent. The Kuala Lumpur Composite Index settled just above the 1,650-point plateau, and now investors are looking for additional support when the market opens on Thursday.
The global forecast for the Asian markets is positive following the release of the minutes of the Federal Reserve's latest monetary policy meeting, which suggested that further stimulus measures are warranted. The European markets were down and the U.S. bourses were mixed, and the Asian markets are tipped to open higher - also largely on profit taking following recent selling.
In its first day back after the four-day weekend for Eid-ul-Fitr, the KLCI finished slightly higher on Wednesday following mild upside from the financial shares, industrial issues and plantation stocks.
For the day, the index added 2.46 points or 0.15 percent to finish at 1,652.25 after trading between 1,649.59 and 1,655.39. Volume was 1.353 billion shares worth 1.623 billion ringgit. There were 399 decliners and 379 gainers, with 301 stocks finishing unchanged.
Among the actives, Ingenuity Solutions, Petronas Chemicals and Maybank all finished higher, while Sime Darby was unchanged and CIMB Group and Astral Supreme ended lower.
The lead from Wall Street is cautiously optimistic as stocks moved higher in the afternoon on Wednesday before ending the day mixed after moving mostly lower in morning trade. The release of the minutes of the latest Federal Reserve meeting contributed to some late-day volatility.
The early weakness followed some troubling economic news from overseas, with a report from Japan showing that the country swung to a trade deficit in July. The Japanese Finance Ministry reported a trade deficit of 517.4 billion yen in July compared to a trade surplus of 60.3 billion yen in June. Japanese exports fell 8.1 percent year-over-year, while imports rose 2.1 percent.
A negative reaction to quarterly results from Dell also weighed on the markets, with the PC giant falling by 5.4 percent. After the close of trading on Tuesday, Dell reported second quarter adjusted earnings that exceeded estimates but on weaker than expected sales. The company also lowered its full year earnings outlook and forecast a 2 to 5 percent sequential drop in third quarter revenues.
Selling pressure was relatively subdued, however, with an upbeat report on existing home sales helping to limit the downside for the markets. The National Association of Realtors said existing home sales rose 2.3 percent to an annual rate of 4.47 million in July from 4.37 million in June.
Stocks subsequently regained some ground following the release of the minutes of the Federal Reserve's latest monetary policy meeting, which suggested that the central bank is losing patience with the pace of the fragile U.S. economic recovery.
Many members of the Federal Reserve said additional monetary policy accommodation is likely warranted unless the economy improves substantially, potentially opening the door for another round of quantitative easing measures at the next meeting in September.
The major U.S. averages were mixed on Wednesday as the Dow fell 30.82 points or 0.2 percent to finish at 13,172.76, while the NASDAQ rose 6.41 points or 0.2 percent to end at 3,073.67 and the S&P 500 edged up 0.32 points or less than 0.1 percent to close at 1,413.49.
In economic news, Malaysia's unemployment rate remained unchanged for the second successive month in June, the Department of Statistics said on Wednesday. The unemployment rate, on an unadjusted basis, came in at 3 percent in June, unchanged from the previous two months. In June 2011, the jobless rate was 3.2 percent.
On a seasonally adjusted basis, the jobless rate was 2.8 percent, lower than the previous month's 3.1 percent. A year earlier, the seasonally adjusted figure was 3 percent.
by RTT Staff Writer
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