KUALA LUMPUR: The local stock market started Wednesday trading on a hesitant footing. Profit-taking activities set in as investors reacted to an overnight fall on Wall Street and concerns over the upcoming release of US bank stress results and the need for recapitalisation at major US banks.
However, investor confidence returned in a big way in the afternoon session, helped by a strong turnaround in other regional markets, notably in Singapore, Hong Kong and Taiwan.
Despite Wall Street and global markets rallying for almost two months now — since the lows of early March, sentiment for equities has certainly been on the mend.
Economic data continues to suggest a bottoming of the US economy, and improved sentiments will in turn lead to stronger confidence among consumers and businesses alike. To be fair, global stock markets have all rallied very strongly. Thus, intermittent profit-taking activities are inevitable — even if most opine that the worst for the global economy is behind us.
Domestic investor sentiment has also been boosted by the recent equity liberalisation moves, as well as high commodity prices. Crude palm oil prices continue to trade above RM2,600 per tonne, nearly double the lows of late last year when de-leveraging and global financial panic saw the commodity plunge to around RM1,400 per tonne.
The KLCI started the day unchanged, but slid into marginal negative territory, where it stayed for almost the entire morning session. The index rose sharply after the lunch break, closing 15.1 points higher at 1,024 points. Market breadth was positive with advancing stocks beating declining ones by a 6-to-1 margin. Volume was robust at 2.5 billion shares — the highest so far this year.
Actively traded stocks include KNM, SAAG, Mulpha, Talam, Time dotCom, Equine and Scomi. Major gainers include MPI, Malayan Banking Bhd (Maybank), Hap Seng, Unisem and Bumputra-Commerce. Losers include BAT, Kulim and KL Kepong.
Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.