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Malaysia Stocks May Halt Losing Streak

The Malaysia stock market has finished lower now in five straight sessions, plummeting more than 55 points or 3.5 percent in that span. The Kuala Lumpur Composite Index settled just below the 1,630-point plateau, and now analysts are forecasting a measure of traction at the opening of trade on Wednesday.

The global forecast for the Asian markets is upbeat thanks to positive earnings figures and encouraging news regarding the budget woes in Washington. On the earnings front, DuPont, Travelers and Delta Air Lines all posted solid quarterly results. Also, President Barack Obama agreed to a bill that would tie an increase in the debt limit to the passage of a budget. The European markets were mixed and the U.S. bourses were higher, and the Asian markets figure to split the difference.

The KLCI finished modestly lower again on Tuesday, continuing to be dogged by concerns over the upcoming election. Financial and industrial stocks were down, although the plantations provided a bit of support.

For the day, the index fell 6.97 points or 0.43 percent to finish at 1,628.66 after trading between 1,602.12 and 1,628.66. Volume was 1.27 billion shares worth 2.23 billion ringgit. There were 484 decliners and 287 gainers, with 329 stocks finishing unchanged.

Among the actives, RHB Capital dropped 1.28 percent, Kuala Lumpur Kepong dipped 0.82 percent, AirAsia plummeted 1.75 percent, Public Bank fell 1.27 percent and Maxis lost 1.09 percent, while Sime Darby and IOI Corporation were unchanged and Maybank added 0.11 percent, Tenaga Nasional gained 0.29 percent and Axiata Group collected 0.95 percent.

The lead from Wall Street is positive as stocks moved higher on Tuesday, extending a recent move to the upside. The markets benefited from a positive reaction to the latest earnings news, although stocks initially were lackluster as traders expressed uncertainty about the outlook for the markets following the recent strength.

The latest batch of earnings news eventually some buying interest, with DuPont (DD), Travelers (TRV), and Delta Air Lines (DAL) all posting gains after reporting quarterly results.

Shares of DuPont rose by 1.8 percent after the chemical giant reported fourth quarter earnings that fell year-over-year but came in above analyst estimates. The company also forecast better than expected results in 2013.

Insurance giant Travelers ended the day up by 2.2 percent after reporting fourth quarter earnings that came in well above expectations. Delta advanced by 2.9 percent after its fourth quarter adjusted earnings matched estimates.

On the other hand, shares of Johnson & Johnson (JNJ) were down after the health care giant reported better than expected fourth quarter earnings but provided disappointing guidance.

The markets may have also benefited from a statement from the White House indicating that President Obama would not oppose a House Republican bill that would tie a short-term increase in the debt limit to the passage of a budget. The House is scheduled to vote on the bill later today.

Meanwhile, traders largely shrugged off a report from the National Association of Realtors showing an unexpected drop by existing home sales in December.

The major U.S. averages finished at their best levels of the day as the Dow rose 62.43 points or 0.5 percent to finish at 13,712.13, while the NASDAQ climbed 8.47 points or 0.3 percent to end at 3,143.18 and the S&P 500 advanced 6.53 points or 0.4 percent to close at 1,492.51. With the gains, the Dow and the S&P 500 reached new five-year closing highs, while the NASDAQ hit its best closing level in three months.

In economic news, Malaysia will on Wednesday provide inflation figures for December, with analysts expecting the rate to rise to 1.4 percent from 1.3 percent in November - when CPI also rose 0.1 percent on month.

Also, Malaysia's unemployment rate declined to 2.9 percent in November from 3.2 percent in October, the Department of Statistics said on Tuesday. In November 2011, the jobless rate was 3.1 percent.

There were around 381,200 unemployed persons in the country at the end of November, lower than about 417,100 recorded in the previous month. Meanwhile, the number of employed persons increased to around 12.64 million from about 12.47 million in the previous month.

On a seasonally adjusted basis, the jobless rate was 3 percent, down from 3.5 percent in October and 3.2 percent in November 2011.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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