Morning Markets Round-up 09/02/2011

Malaysian Stocks May Extend Winning Streak

The Malaysian stock market has finished higher now in three straight sessions, collecting nearly 20 points or 1.2 percent in the process. The Kuala Lumpur Composite Index finished just shy of the 1,540-point plateau, although now investors are looking for further gains when the market kicks off trade on Wednesday.

The global forecast for the Asian markets is cautiously optimistic thanks to solid corporate news - although news of a rate hike from China may weigh on investors. Property stocks are expected to provide support, along with gold, technology and retail shares - while oil companies may succumb to profit taking. The European and U.S. markets ended higher, and the Asian bourses are predicted to follow suit.

The KLCI finished slightly higher on Tuesday, nudged into the green by gains from the telecoms, financials and plantations.

For the day, the index collected 3.95 points or 0.26 percent to finish at 1,539.55 after trading between 1,538.76 and 1,544.35. Volume was 3.18 billion shares worth 2.74 billion ringgit. There were 506 gainers and 379 decliners, with 257 stocks finishing unchanged.

Among the gainers, Axiata, Telekom, Petronas Chemical, MISC, F&N and MTD all finished higher.

The lead from Wall Street is positive as stocks moved mostly higher over the course of the trading day on Tuesday, with traders reacting positively to some upbeat corporate news. The strength that emerged in the markets helped to once again lift the major averages to new multi-year closing highs.

WALL STREET >>> Dow Topples 12200

Stocks got off to a sour start this morning, as word hit the Street that China hiked its interest rate by 25 basis points, marking the nation's second increase in six weeks, and its third since mid-October. However, the bulls quickly proved their resilience, with all three major market indexes barreling into the black within the first hour of trading. Fueling the fire was a continued spate of merger-and-acquisition news, led by Kindred Healthcare's (KND)$900 million purchase of RehabCare Group (RHB), as well as an encouraging sales report from McDonald's Corp. (MCD). More specifically, the blue-chip restaurateur said same-store sales increased by slightly more than expected in January, thanks to stronger-than-anticipated sales across the pond. With the stars seemingly aligned, all three major market indexes continued their quest for fresh multi-year highs, with the Dow Jones Industrial Average (DJIA) extending its winning streak to seven sessions – the best in almost seven months.

The Dow Jones Industrial Average (DJIA – 12,233.15) settled a hair's breadth shy of its intraday peak of 12,238.79 – a level not explored in almost two and a half years – adding 71.5 points, or 0.6%, by the close. What's more, today marks the Dow's first finish north of the elusive 12,200 level since June 16, 2008. Only six of the index's 30 components bucked the trend higher, with Exxon Mobil (XOM) leading the laggards, while McDonald's Corp. paced the 24 advancing equities with a gain of 2.6%. Meanwhile, the session was essentially a wash for Hewlett-Packard (HPQ), which finished flat. 

The S&P 500 Index (SPX – 1,324.57) followed suit, advancing 5.5 points, or 4.4%, to settle even closer to its own intraday peak of 1,324.87 – its loftiest price since June 2008. Not to be outdone, the Nasdaq Composite (COMP – 2,797.05) ended at a session high – and three-plus-year peak – tacking on 13.1 points, or 0.5%, by the bell. However, the tech-rich index is still staring up at round-number resistance in the 2,800 region, which hasn't been surmounted since November 2007.

CRUDE OIL

Crude futures ended a volatile session in the red today, after China's latest rate hike sparked fears of ebbing demand in the world's No. 2 crude consumer. Early in the session, rumors of a "sit-in" among workers at the Suez Canal sent the front-month contract north of $88 per barrel, though black gold reversed course after a rep for Egypt-based Kadmar Group assured Dow Jones Newswires that operations at the canal were "running normally." Against this backdrop, March-dated crude oil futures gave up $0.54, or 0.6%, to end at $86.94 per barrel.