The Malaysia stock market on Monday halted the four-day winning streak in which it had risen almost 25 points or 1.5 percent. The Kuala Lumpur Composite Index finished just below the 1,585-point plateau, and now analysts are forecasting little movement at the opening of trade on Tuesday.
The global forecast for the Asian markets is mixed with a slight upside bias, as investors are expected to go shopping after the bourses took heavy damage on Monday. The upside may be limited by concerns about the new government in Greece, which has vowed to end austerity measures and reject the terms of Greece-Troika bailout deal. The European and U.S. markets were mixed to higher, and the Asian bourses figure to follow suit.
The KLCI finished modestly lower on Monday following losses from the financial shares, industrial issues and plantation stocks.
For the day, the index lost 6.17 points or 0.39 percent to finish at 1,584.87, after trading between 1,579.74 and 1,585.54. Volume was 963.02 million shares worth 1.194 billion ringgit. There were 540 decliners and 208 gainers, with 305 stocks finishing unchanged.
Among the actives, Sime Darby finished lower, while Maybank and Ariantec Global were unchanged and CIMB Group, Time Engineering and SAAG Consolidated ended higher.
The lead from Wall Street is cautiously optimistic as stocks showed a lack of direction on Monday, with traders expressing uncertainty about the situation in Europe following recent election results. Selling pressure remained relatively subdued, however, limiting the downside for the markets. The markets recovered from weakness in early trading but ended the day nearly flat.
The slow start reflected a negative reaction to election results in France and Greece, which some saw as a setback to the progress achieved thus far on the European debt crisis.
Francois Hollande won a run-off election against French President Nicolas Sarkozy and will become France's first Socialist president since 1995. Hollande has expressed significant opposition to using austerity measures to address the European debt crisis, arguing that the focus should be more on economic growth than cutting government spending.
Additionally, the results of Greek elections pointed to a hung parliament, with no single party getting adequate votes to form a government. Many Greek voters turned to anti-bailout parties.
Among individual stocks, Vertex Pharmaceuticals (VRTX) moved sharply higher after the biotech company released data showing that its cystic fibrosis combination therapy resulted in significant improvements in lung function. Shares of Tyson Foods (TSN) also jumped after the meat producer reported quarterly earnings that beat estimates.
Meanwhile, Cognizant Technology (CTSH) came under pressure after the information technology services provider reported first quarter earnings growth but lowered its full-year guidance. AIG (AIG) also closed in the red after the company said the Treasury has priced an offering of 163.9 million shares of its common stock at $30.50 per share.
The major averages eventually finished the session mixed, as the Dow fell 29.74 points or 0.2 percent to finish at 13,008.53, while the NASDAQ edged up 1.42 points or 0.1 percent to end at 2,957.76 and the S&P 500 crept up by 0.48 points or less than a tenth of a percent to 1,369.58.
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