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Thursday, December 2, 2010

ZLBT's Morning Market Round-up

Higher Open Called For Malaysian Market
The Malaysian stock market has alternated between positive and negative finishes through the last four trading days, since the end of two-day winning streak in which it collected nearly 10 points or 0.7 percent. The Kuala Lumpur Composite Index finished just above the 1,485-point plateau, and now analysts are expecting to see the market extend its gains when it kicks off trade on Thursday.

The global forecast for the Asian markets is broadly positive, thanks to bargain hunting and better than expected economic data out of the United States. Support is likely to be broadly based but featuring properties, steel stocks and oil companies in particular. The European and U.S. markets finished sharply higher, and the Asian markets are also expected to track to the upside.

The KLCI finished flat on Wednesday as gains from the plantation stocks were erased by selling among the financial shares and industrial issues.

For the day, the index added just 0.19 points or 0.01 percent to finish at 1,485.42 after trading between 1,477.57 and 1,487.67. Volume was 886.2 million shares worth 1.6 billion ringgit. There were 366 decliners and 364 gainers, with 296 stocks finishing unchanged.

Among the actives, Kuala Lumpur Kepong, Petronas Daganan, Kulim, IOI Corporation, Maxis and MISC all finished higher, while K-Star and Sime Darby ended lower.

Dow Skyrockets 249 Points as Bulls Ring in December
The bulls brought in December with a bang today, as buying pressure flooded the market on the heels of a rather dreary November. Overseas data provided an early lift, with traders cheering robust economic reports from China and the euro zone. On the home front, payroll processor ADP helped stoke the merry mood by reporting that private-sector employers added 93,000 jobs last month. Meanwhile, in afternoon trading, the Federal Reserve's latest Beige Book release confirmed that the economy continued to improve at a modest pace during October and November. In fact, even the Big Three automakers contributed to today's bull run -- General Motors (GM), Ford (F), and Chrysler all reported double-digit percentage gains in their respective November sales reports.

"The bottom line is, the recent pullback simply worked off the overbought nature of the market," explained a senior analyst. "Sure, there were some scary reasons for the recent sell-off. But as the economic data continues to support a growing economy, the chances of a move back to new highs before the end of the year are very good."

By the time the dust settled, the Dow Jones Industrial Average (DJIA – 11,255.78) racked up an impressive gain of 249.8 points, or 2.3%, as all 30 of its components closed solidly higher. Retail titan Home Depot (HD) led the pack with a 4.6% gain. Thanks to today's breakout rally, the Dow closed above short-term resistance at 11,200 for the first time since Nov. 19, and toppled its 10-day and 20-day moving averages in the process. These short-term trendlines hadn't been surmounted on a daily closing basis since Nov. 10.

The S&P 500 Index (SPX – 1,206.07) followed suit by tacking on 25.5 points, or 2.2%. In the process, the SPX ended the day north of 1,200 for the first time since Nov. 11. Finally, the Nasdaq Composite (COMP – 2,549.43) rounded out the day's rally by rising 51.2 points, or 2.1%. Like the Dow, the SPX and COMP both ended the session comfortably north of their respective 10-day and 20-day moving averages.

Crude futures climbed in step with stocks today, as trader rediscovered their appetite for riskier assets. Upbeat manufacturing data from China helped boost black gold's appeal, as did ADP's rosy report on the U.S. jobs market. In fact, the buying mood was so contagious, traders completely overlooked an unexpected surge in domestic crude inventories. By the close, crude oil for January delivery was up $2.64, or 3.1%, to finish at $86.75 per barrel.

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