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Wednesday, November 3, 2010

ZLBT's Morning Pre-Markets Round-up

Malaysian Stocks Snapped 6 Days Winning Streak
Rebounds Muted After 1.3% Gains

The Malaysian stock market on Tuesday eased just a handful of points - but that was enough to end the six-day winning streak in which it had collected nearly 20 points or 1.3 percent. The Kuala Lumpur Composite Index finished just above the 1,505-point plateau, although now investors are looking for a modest rebound 9if any) when the market kicks off trade on Wednesday.

The global forecast for the Asian markets is positive, thanks to optimism over the U.S. elections and the expected stimulus announcement on Wednesday from the FOMC. Oil stocks are seen providing major support on a weakening dollar, while the properties, steel companies and airlines also may rise. The European and U.S. markets finished higher, and now the Asian bourses are tipped to follow suit.

The KLCI finished slightly lower on Tuesday as both the financial and plantation sectors finished mixed.For the day, the index eased 3.09 points or 0.20 percent to finish at 1,506.57 after trading between 1,504.72 and 1,509.79. Volume was 1.20 billion shares valued at 1.61 billion ringgit. There were 463 decliners and 279 gainers.

Among the actives, Genting, Axiata, AMMB, Maybank and IOI Corporation all finished lower, while BAT and Hong Leong Bank ended higher.

The lead from Wall Street is optimistic as stocks saw notable gains on Tuesday with Americans taking to the polls to decide the outcome of the midterm elections. Optimism about prospective Republican gains contributed to the strength in the markets along with the day's dollar weakness, which came as Australia unexpectedly hiked its key interest rate.

The strength in the markets came as voters went to the polls, with most signs pointing to big gains for Republicans, who are seen as friendlier to business. A pullback by the U.S. dollar also gave way to a buying opportunity in stocks after the Reserve Bank of Australia unexpectedly raised its key interest rate by 25 basis points to 4.75 percent. The bank concluded that the balance of risks had shifted to the point where an early, modest tightening of monetary policy was prudent, RBA Governor Glenn Stevens said in a statement.

Other movement among stocks was guided by quarterly results as earnings season continues to wind down.Video-game publisher Electronic Arts said after the markets closed that its second quarter loss narrowed from last year, as lower costs and expenses offset a sharp drop in revenue. The Redwood City, California-based company reported a GAAP net loss for the second quarter of $201 million or $0.61 per share, compared to a GAAP net loss of $391 million or $1.21 per share for the year-ago quarter.

Pharmaceutical giant Pfizer Inc. (PFE) reported adjusted third-quarter earnings of $0.54 per share, which beat estimates by 3 cents, while its revenues missed forecasts despite a 39 percent increase. The drug maker's 2010 earnings and revenue forecasts were largely in-line with expectations. Oil giant BP Plc (BP) reported a sharp decline in its third-quarter profit after it took a $7.7 billion pre-tax charge related to the massive Gulf of Mexico oil spill.

The major averages moved roughly sideways going into the close of trading, holding on to strong gains.

The Dow rose 64.10 points or 0.6 percent to 11,188.72 and the S&P 500 advanced 9.19 points or 0.8 percent to 1,193.57, with both setting six-month closing highs. The NASDAQ jumped 28.68 points or 1.1 percent to 2,533.52, its best closing level since June of 2008.

In economic news, Malaysia is on Wednesday scheduled to release September figures for imports, exports and trade balance. Imports are expected to rise 16.3 percent on year following the 16.5 percent annual expansion in August. Exports are tipped to add an annual 10.1 percent after collecting 10.6 percent in the previous month. The trade balance is expected to show a surplus of $8.09 billion, down from $8.32 billion a month earlier.

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