KLCI on recovery path 19 May 2009

Confidence in world stocks jumped higher on Tuesday. Investors chased shares anew, pushing prices broadly higher, after some selling pressure in recent days. Relevant bellwether indices in key Asian markets, including the Bursa Malaysia, traded on a firmer footing. Most closed sharply higher.Sentiment was bolstered by Wall Street's overnight gains.

The Dow Jones Industrial Average advanced 235 points overnight. Investor optimism of an imminent recovery was rejuvenated by better than expected earnings from home-improvement chain Lowe's and an uptick in confidence level of homebuilders.

Sentiment was also buoyed by a rash of positive analysis on the health of US financial institutions. These reports bolstered expectations of a bottom for the housing and financial markets, which were the trigger points for the current global economic downturn. On the other hand, recent economic data has been somewhat confusing — a mixture of good and bad news. That had kept investors on their toes.It is highly likely that upcoming data will continue to be mixed as the global economy struggles to recover from the worst recession since the Great Depression. On the positive note, its does appear like the worst is indeed in the past.

The KL Composite Index opened sharply higher and stayed in positive territory throughout the day. The benchmark index closed 11.5 points higher at 1,023.5 points. Some of the top gainers include Top Glove, Bursa Malaysia and Tanjong plc. Market breadth was also in the black through the trading day.

At the close, gaining counters outnumbered losing ones by a ratio of roughly seven to two.Trading volume improved slightly from the previous day. Over 1.75 billion shares changed hands on Tuesday. The warrants for TA Enterprise was the most heavily traded counter for the day. Other actively traded stocks were KNM, SAAG, Compugates, Scomi and Lion Diversified.