ZLBT Morning Views >>> Bursa Malaysia + Wall Street

Malaysian Stocks To Test 1550 Support Again
The Malaysian stock market has finished lower in back-to-back sessions, although it has lost just 8 points or 0.5 percent in that span. The Kuala Lumpur Composite Index finished just above the 1,550-point plateau, and now analysts are forecasting a neutral / steady open for the market on Wednesday with market sentiments slightly on the downside bias.

The global forecast for the Asian markets offers little guidance as the bourses are expected to pause and catch their breath after several days of selling pressure. Technology stocks and financials are expected to fall, with property stocks providing support. The European markets finished mixed but little changed, while the U.S. bourses ended barely lower - and the Asian markets figure to split the difference.

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

For the day, the index eased 0.25 points or 0.02 percent to finish at 1,551.89 after trading between 1,548.30 and 1,553.05. Volume was 705.809 million shares worth 1.339 billion ringgit. There were 428 gainers and 297 decliners, with 324 stocks finishing unchanged.

Among the gainers, Public Bank, CIMB Group, Tradewinds Plantation, Glenealy Plantations, Maybank and Negri Sembilan Oil Palms all finished higher.

The lead from Wall Street is flat with a touch of downside as stocks came under pressure late in the day on the heels of comments from Federal Reserve Chairman Ben Bernanke, pulling the major averages into negative territory. Speaking at the International Monetary Conference in Atlanta, Bernanke indicated that the Fed is likely to leave accommodative monetary policy in place due to slower than expected economic growth.

In economic news, Malaysia's international reserves increased to $132.75 billion as on May 31, Bank Negara Malaysia said on Tuesday. That compares to $132.62 billion as on May 13. The latest reserve position was sufficient to finance 9.3 months of retained imports and 4.4 times the short-term external debt.

Foreign currency reserves rose to $120.6 billion from $120.4 billion. At the same time, IMF reserve position remained unchanged at $0.7 billion and SDR at $2 billion. The value of gold also stayed at $1.7 billion. Other reserves fell to $7.7 billion from $7.8 billion as on May 13. 

WALL STREET : Bernanke Speech Deflates the Bulls; DJIA Surrenders 19 Points
Stocks got off to a solid start this morning, as traders hunted for bargains following four straight sessions of declining prices. In addition, International Paper's (IP) unsolicited bid for Temple-Inland (TIN) helped to lift early sentiment, fueling optimism about the collective corporate purse strings. However, the Street's cheer subsided the closer Ben Bernanke got to the podium, as traders exercised caution ahead of the Federal Reserve chairman's late-session speech.

The Dow Jones Industrial Average (DJIA – 12,070.81) surrendered a healthy lead in the final hour of trading, ending on a loss of 19.2 points, or 0.2%. Cisco Systems (CSCO) led the 14 decliners with a 3% drop, while Intel Corp. (INTC) paced the 15 advancing equities with a gain of nearly 1.1%. Pfizer (PFE), meanwhile, split the difference by ending flat. Today marks the Dow's fifth consecutive down day, as well as its second straight finish south of 12,100.


The S&P 500 Index (SPX – 1,284.94) also performed an about-face in late-session trading, giving up 1.2 points, or 0.1%, by the close. In the same vein, the Nasdaq Composite (COMP – 2,701.56) retreated in the final minutes before the bell, giving up a relatively modest 1 point, or less than 0.1%, to salvage its perch atop the 2,700 level.

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