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Friday, February 25, 2011

ZLBT Morning Markets Round-up 25 Feb 2011

Malaysian Stocks May See Bargain Hunting
The Malaysian stock market has finished lower now in three straight trading days, declining more than 35 points or 2.2 percent in the process. The Kuala Lumpur Composite Index finished just below the 1,490-point plateau, although now traders are hoping the market may find some traction when it kicks off trade on Friday.
The global forecast for the Asian markets remains fraught with uncertainty in light of tensions in the Middle East and North Africa - although many of the regional bourses have taken heavy damage already this week and are ripe for bargain hunting. Technology stocks and airlines are likely to be scooped up, while gold and oil may decline on profit taking. The European and U.S. markets finished mixed, and the Asian markets are expected to follow suit.

The KLCI finished sharply lower on Thursday, following heavy losses from the financial and plantation stocks - as well as more moderate declined among the industrials.

For the day, the index shed 21.24 points or 1.41 percent to finish at 1,489.87 after trading between 1,489.87 and 1,511.39. Volume was 2.003 billion shares worth 2.623 billion ringgit. There were 863 decliners and 116 gainers, with 154 stocks finishing unchanged.

Among the decliners, Tenaga Nasional, Malaysia Airlines, Public Bank, Sime Darby, CIMB Holdings, Kuala Lumpur Kepong and IOI Corporation all finished lower.

Wall Street provides little clarity as stocks saw a mixed close after a volatile session on Thursday, with a combination of bargain hunting and risk aversion pulling market sentiment in opposite directions. Concerns about continued Middle East protests remained a market headwind, while the U.S. economy continued to show improvement, with jobless claims slipping back below the 400,000 mark.

DJIA Trims Deficit as Crude Settles South of the Century Mark
Some attributed oil's about-face to rumors that Libyan leader Gadhafi had been shot
Stocks spent most of the session swimming in red ink today, as oil futures initially continued their run into triple-digit territory. Intensified political turmoil in Libya – the eastern part of which is now largely controlled by anti-government rebels – sent black gold as high as $103 per barrel, overshadowing surprisingly encouraging data on both jobless claims and durable goods. However, crude futures eventually cooled off in afternoon trading, reversing course to finish south of the psychologically significant century mark. Against this backdrop, the major market indexes pared their deficits in the final hours of trading, with the tech-rich Nasdaq Composite even notching a gain by the close.

The Dow Jones Industrial Average (DJIA – 12,068.50) found itself more than 122 points in the red – and on the south side of 12,000 for the first time in three weeks – today, but eventually trimmed its deficit to 37.3 points, or 0.3%. Twelve of the Dow's 30 blue chips ended higher, led by General Electric's (GE) 1.7% gain, while Hewlett-Packard (HPQ) paced the bearish majority with a loss of nearly 3.3%.

In the same vein, the S&P 500 Index (SPX – 1,306.10) also chipped away at its deficit in afternoon trading, giving up just 1.3 points, or 0.1%, by the closing bell. Earlier in the session, the SPX had dipped as low as 1,294.26 – in territory not explored in three weeks. Finally, the Nasdaq Composite (COMP – 2,737.90) fared the best of the three, tacking on 14.9 points, or 0.6%, with help from Priceline.com's (PCLN) earnings-related rally. However, the tech-rich index is still sitting on a loss of more than 3.3% for the week – the worst of its peers.

Crude Falls On Rumours Gaddafi's Been Shot
After rallying as high as $103 per barrel in early trading, crude futures performed an about-face to finish in the red. While many economists attributed the reversal to positive political developments in Algeria and Saudi Arabia – neighbors of Libya – at least one news source cited unsubstantiated rumors that Muammar Gadhafi had been shot.
Meanwhile, Treasury Secretary Timothy Geithner likely contributed to crude's pullback, assuring the Street that substantial global oil reserves should help curb any supply disruptions. Whatever the catalyst, crude oil for April delivery finished 82 cents, or 0.8%, lower to end at $97.28 per barrel.

GOLD Attempt To Surpass Early Dec High
Gold futures settled slightly higher today, as continued turmoil in Libya amplified the metal's safe-haven appeal. However, the commodity's gains were somewhat limited, thanks to anxiety about physical demand in India, as well as easing inflationary concerns. 
"We're not seeing a broad-based inflation trend," said President Obama, speaking at a Council on Jobs and Competitiveness meeting. 

Against this backdrop, April-dated gold futures added $1.80, or 0.1%, to end at $1,415.80 an ounce – the front-month contract's best finish since Jan. 3.

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