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Malaysia Stock Market Likely To Extend Losing Streak

Ahead of Thursday's holiday for the Muslim New Year, the Malaysia stock market had finished lower in back-to-back sessions, shedding almost 10 points or 0.6 percent along the way. The Kuala Lumpur Composite Index settled just above the 1m630-point plateau, and now analysts are forecasting further damage at the opening of trade on Friday.

The global forecast for the Asian markets remains soft on weak economic data from and Europe and the United States - although bargain hunting may protect some of the more oversold bourses. The Eurozone slipped into recession in the third quarter, despite increases in both Germany and France. A jump in U.S. weekly jobless claims also weighed on investors, as did the sharp decline in the Philly Fed index. The impending fiscal cliff in the U.S. also remains a concern. The European and U.S. markets were down again on Thursday, and the Asian markets figure to open in similar fashion

The KLCI finished slightly lower on Wednesday as losses from the plantation stocks and industrial issues were offset by mild upside from the financial shares.

For the day, the index shed 5.91 points or 0.36 percent to finish at 1,631.68 after trading between 1,629.24 and 1,638.84. Volume was 888.22 million shares worth 1.8 billion ringgit, There were 357 decliners and 308 gainers, with 325 stocks finishing unchanged.

Among the actives, Maxis fell 1.05 percent, Telekom Malaysia retreated 0.54 percent, Sime Darby dropped 0.72 percent and CIMB Group shed 0.26 percent, while RHB Capital jumped 1.05 percent, Maybank added 0.33 percent and Kuala Lumpur Kepong collected 0.39 percent.

The lead from Wall Street suggests continued consolidation as stocks turned in a lackluster performance on Thursday before ending modestly lower. The weakness came as traders digested a batch of disappointing U.S. economic data that largely reflected distortions due to the major disruptions caused by Hurricane Sandy.

The Labor Department said jobless claims jumped to 439,000 in the week ended November 10, an increase of 78,000 from the previous week's revised figure of 361,000. Economists had expected jobless claims to climb to 376,000. The increase lifted jobless claims to their highest level since 464,000 in the week ended April 30, 2010.

However, the data was distorted by the impact of Hurricane Sandy, with several states in the mid-Atlantic and Northeast regions reporting large increases due to the storm. The New York and Philadelphia Federal Reserves also released separate reports showing contractions in regional manufacturing activity in November.

A negative reaction to quarterly results from Wal-Mart (WMT) also weighed on investor sentiment, with the retail giant falling by 3.6 percent. While Wal-Mart reported third quarter earnings that came in above analyst estimates, the company also reported sales that came in below expectations.

The continued weakness among stocks also reflected lingering concerns about the looming fiscal cliff as well as worries about escalating violence in the Gaza Strip.

The major U.S. averages were down on Thursday as the Dow dipped 28.57 points or 0.2 percent to finish at 12,542.38, while the NASDAQ fell 9.87 points or 0.4 percent to end at 2,836.94 and the S&P 500 edged down 2.17 points or 0.2 percent to close at 1,353.32. With the losses, the Dow and the NASDAQ fell to their lowest closing levels since June, while the S&P hit its lowest closing level in over three months.

In economic news, Malaysia will on Friday announce Q3 figures for GDP and current account. In the second quarter, GDP was up 3.0 percent on quarter and 5.4 percent on year, while the current account saw a surplus of 9.60 billion ringgit.

by RTT Staff Writer

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