Thursday, 20 August 2009 17:26
Shares on the Bursa Malaysia traded on a firmer footing Thursday, Aug 20 bolstered by Wall Street’s overnight gains. The FBM KLCI opened in positive territory and moved higher as the day progressed, mirroring the gradually improving sentiment in other key Asian markets. Relevant bellwether indices in the regional markets traded broadly higher.
Investors were comforted by the stronger close in US stocks overnight. The Dow Jones Industrial Average managed to claw back early losses to finish about 61 points higher. Although trading remained somewhat erratic, flagging confidence in the economic recovery was given a boost by the latest report of a drop in US oil stockpiles.
Investors took that to mean that energy demand is rising and the economy is on the mend. Crude oil futures in electronic trading on the New York Mercantile Exchange inched higher to about US$72.50 per barrel.Sentiment was also helped by a rebound in Chinese share prices. The Shanghai Composite Index, which tracks the larger of the country’s stock exchanges, gained 4.5% on Thursday, recouping some of its recent losses.
The index had lost almost 20% at its low in little over two weeks.Despite the improved sentiment, outlook for world stocks remains uncertain. Investors will continue to look for clues on how fast the global economy will recover from its worst recession in decades. We suspect economic data will continue to be patchy, which could translate into greater volatility for stock markets.The FBM KLCI finished the day eight points higher at 1,163.4.
Some of the big gainers include Tanjong plc, KL Kepong, Genting and Bursa Malaysia. Market breadth was positive for the better part of the trading day. At the close, there were two gaining counters for every losing one.
Market volume fell to less than 685 million shares as more investors moved to the sidelines pending greater clarity on the market’s outlook. Multi Sports Holdings, Compugates, KNM and Time Engineering were some of the most actively traded counters for the day.