Plus   Neg

Malaysia Stock Market May Halt Losing Streak

The Malaysia stock market has closed lower now in four straight trading days, shedding more than 15 points or 1.1 percent in that span. The Kuala Lumpur Composite Index closed just below the 1,625-point plateau, although now traders may be tempted to scoop up bargains when the market kicks off trade on Tuesday.

The global forecast for the Asian markets is positive on optimism that the U.S. fiscal cliff will soon be resolved, as well as upbeat housing data from the United States. But the upside may be capped by caution after France lost its AAA credit rating when it was downgraded by Moody's. The European and U.S. markets were sharply higher on Monday and the Asian bourses are expected to open in similar fashion.

The KLCI finished modestly lower on Monday following losses from the financial shares, industrial issues and plantation stocks.

For the day, the index lost 5.97 points or 0.37 percent to finish at 1,623.31 after trading between 1,620.51 and 1,626.96. Volume was 848.81 million shares worth 1.112 billion ringgit. There were 378 decliners and 280 gainers, with 335 stocks finishing unchanged.

Among the actives, Maybank, CIMB Group and Sime Darby all finished lower, while Karambunai Corp, Tiger Synergy and Luster Industries all ended higher.

The lead from Wall Street is firmly upbeat as stocks moved sharply higher on Monday, climbing further off last Thursday's lows. The markets benefited from optimism about the fiscal cliff as well as a pair of positive housing reports.

News of a constructive meeting on the looming fiscal cliff on Friday generated some positive sentiment along with subsequent comments by leaders of both parties. Without action by Congress, approximately $600 billion in automatic tax increases and government spending cuts are due to go into effect at the end of the year.

A pair of upbeat U.S. housing reports also generated buying interest, suggesting a continued recovery by the housing market. The National Association of Realtors said that existing home sales rose 2.1 percent to an annual rate of 4.79 million in October from a downwardly revised 4.69 million in September. Economists had expected sales to fall to 4.70 million from the 4.75 million originally reported for the previous month.

Additionally, the National Association of Home Builders said its index of homebuilder confidence rose for the seventh consecutive month in November, reaching a new six-year high. The NAHB/Wells Fargo Housing Market Index surged up to 46 in November from 41 in October, versus forecasts for a reading of 42.

Traders also reacted positively to quarterly results from Lowe's (LOW), with the home improvement retailer jumping 6.2 percent after reporting better than expected third quarter earnings and sales. The company also raised its full-year revenue forecast.

The major U.S. averages were sharply higher on Monday as the Dow jumped 207.65 points or 1.7 percent to finish at 12,795.96, while the NASDAQ soared 62.94 points or 2.2 percent to end at 2,916.07 and the S&P 500 surged 27.01 points or 2 percent to close at 1,386.89.

by RTTNews Staff Writer

For comments and feedback: editorial@rttnews.com

Market Analysis

Follow RTT