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Malaysia Stock Market May Reverse Thursday's Losses

1/10/2013 7:02 PM ET

The Malaysia stock market has alternated between positive and negative finishes through the last seven trading days since the end of the five-day winning streak in which it had risen more than 30 points or 1.9 percent. The Kuala Lumpur Composite Index settled just shy of the 1,685-point plateau, and now traders are anticipating another rangebound performance when the market kicks off trade on Friday.

The global forecast for the Asian markets is mixed, with positive economic news from Europe and Asia offset by soft data from the United States. The Asian markets already had a chance to react to much better than expected Chinese trade data. And in Europe, the European Central Bank decided to leave interest rates unchanged at a record low. But the United States saw an increase in initial jobless claims. The European markets were down and the U.S. bourses were higher, and the Asian markets figure to split the difference.

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

For the day, the index dipped 5.36 points or 0.32 percent to finish at 1,684.57 after trading between 1,684.57 and 1,693.72. Volume was 1.154 billion shares worth 1.339 billion ringgit. There were 387 decliners and 310 gainers, with 341 stocks finishing unchanged.

Among the actives, Maybank, Sime Darby, CIMB Group and Nextnation Communications all finished lower, while Patimas Computers ended higher.

The lead from Wall Street is positive as stocks fluctuated on Thursday but largely maintained a positive bias before ending notably higher. With the gains over the past two days, the major averages have more than offset the weakness seen earlier this week. The S&P 500 ended the day at a new five-year closing high.

The strength was partly due to some upbeat Chinese trade data, as the nation's trade surplus swelled to $31.6 billion in December from $19.6 billion in November. Chinese exports rose 14.1 percent on year, the fastest rate of growth in seven months. Chinese imports also saw 6 percent annual growth.

Traders also reacted positively to news out of Europe, where the European Central Bank decided to leave interest rates unchanged at a record low. ECB President Mario Draghi said economic weakness in the euro area is expected to extend into the new year but said economic activity should gradually recover later in 2013.

Meanwhile, traders largely shrugged off a report from the Labor Department showing that initial jobless claims rose to 371,000 in the week ended January 5 from the previous week's revised figure of 367,000. Economists had expected jobless claims to drop to 362,000 from the 372,000 originally reported for the previous week.

Profit taking may also cap the upside for the Asian markets. The major U.S. averages were higher on Thursday as the Dow rose 80.71 points or 0.6 percent to finish at 13,471.22, while the NASDAQ climbed 15.95 points or 0.5 percent to end at 3,121.76 and the S&P 500 advanced 11.10 points or 0.8 percent to close at 1,472.12.

In economic news, industrial production in Malaysia expanded 7.5 percent on year in November, the Department of Statistics said on Thursday - beating forecasts for a 5.9 percent gain following the upwardly revised 6.4 percent jump in October. Manufacturing production gained 7.6 percent on year, following a revised 6.6 percent rise in the previous month.

On a seasonally adjusted monthly basis, industrial production was up 1.4 percent, while manufacturing also increased 1.4 percent month-on-month. During the first 11 months of the year, industrial production added 4.2 percent on year.

Also, the statistical agency said that factory sales grew 7.4 percent on year to 51.1 billion ringgit in November after a 3.2 percent rise in October. Month-on-month, sales value fell 4.1 percent.

by RTT Staff Writer

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