The Malaysian stock market has finished higher now in back-to-back sessions, rising 8 points or 0.5 percent in that span. The Kuala Lumpur Composite Index ended just above the 1,566-point plateau. However, traders are bracing for a mild correction to the downside when the market opens on Thursday. due to the DJIA overnite 80.3 points losses. Optimistically, some follow-up momentum of recent sessions should come into play when the local bourse dips as limited selling pressure was evident.
The global forecast for the Asian markets is firmly negative following downbeat economic news from the United States. Airlines figure to lead the markets lower, along with retail stocks and financials - although gold may provide some support. The European and U.S. markets finished under pressure, and the Asian markets also are expected to track to the downside.
The KLCI finished modestly higher on Wednesday following slim gains from the financial shares, industrial issues and plantation stocks.
For the day, the index added 6.56 points or 0.42 percent to finish at 1,567.35 after trading between 1,559.95 and 1,567.35. Volume was 847.12 million shares worth 1.52 billion ringgit. There were 383 decliners and 362 gainers.
Among the actives, Genting Malaysia, Lion Corporation and CIMB Group all finished higher, while KBB Resources and Maybank were unchanged and MAA Holdings and Petronas Chemicals ended lower.
The lead from Wall Street suggests consolidation as stocks came under pressure on Wednesday after showing a lack of direction throughout much of the day. The pullback was partly due to news that the Federal Reserve lowered its forecast for U.S. economic growth.
The Feds Trimmed Growth Forecast For 2011 & 2012
The central bank occupied the spotlight throughout the session, as a midday interest rate decision from the Federal Open Market Committee (FOMC) was followed by an afternoon press briefing with Chairman Ben Bernanke. The FOMC stood pat on rates, to no one's surprise, and confirmed that its $600 billion bond-buying program -- dubbed "QE2" -- is on track to conclude at the end of the month. What's more, the Fed trimmed its 2011 and 2012 growth estimates for the U.S. economy, and simultaneously nudged its core inflation forecasts higher. "We don't have a precise read on why this slower pace of growth is persisting," admitted Bernanke during his Q&A session. "One way to think about it is that maybe some of the headwinds that have been concerning us -- like weakness in the financial sector, problems in the housing sector, balance sheets and deleveraging issues -- some of these headwinds may be stronger, more persistent than we thought." After spending most of the day churning aimlessly around the breakeven line, the major market indexes responded to Bernanke's cautious comments by dropping decisively lower during the final hour of the session, unceremoniously ending a four-day winning streak.
The Dow Jones Industrial Average (DJIA – 12,109.67) ended on a loss of 80.3 points, or 0.7%, as 28 of its 30 components succumbed to the late-day sell-off. Boeing (BA) gave up 2.5% to lead the laggards, while American Express (AXP) and Coca-Cola (KO) were the only two blue chips to close higher. As a result of today's decline, the Dow sacrificed its short-lived foothold above its 20-day moving average -- but the index remains north of both its 10-day trendline and the 12,100 level.
After rising as high as 1,298 shortly after Bernanke started speaking, the S&P 500 Index (SPX – 1,287.14) shed 8.4 points, or 0.7%, to end up sandwiched between its own 10-day and 20-day moving averages. The Nasdaq Composite (COMP – 2,669.19) kept pace with its peers by losing 18.1 points, or 0.7%, but notched a second straight daily close above its 10-day trendline.
HAPPY TRADING & GOODLUCK2ALL
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