Market at new high for year

Wednesday, 16 September 2009 17:58

Sentiment for equities was firmer on Wednesday, Sept 16 in key Asian markets. Shares moved broadly higher after US stocks erased early losses to close at their highest levels in almost a year. Investor confidence was also bolstered after the US Federal Reserve Chairman Bernanke called an end to the recession, the worst we have seen in decades.

The Dow Jones Industrial Average and broader-based Standard & Poor’s 500 Index closed on a positive note overnight. Both indices are now at their highest levels since early-October 2008.

US stocks were bolstered by the latest retail sales data for August, which grew at a faster than expected pace of 2.7%, the most in three years. Whilst the figure was boosted by the government’s “cash for clunkers” programme, which spurred car sales, other segments too fared better than expected.

That lifted hopes that consumers are opening their wallets again. Having said that, it is far too early to reach any conclusion and one point certainly does not a trend make. For instance, the cash rebate programme has ended and many car dealers expect sales to fall back in the near term.

On the home front, the FBM KLCI closed at another fresh high for the year. To be sure, gains were, once again, capped. But this may not be a bad thing as the market needs time to consolidate its recent gains.

The benchmark index closed 5.5 points higher at 1,213. Some of the big gainers include Proton, Mudajaya, MISC and Genting. Market breadth was positive throughout the trading day. At the close, there were almost two gaining stocks for every losing one.

Market volume totaled 808 million shares, led by strong trading interest in KNM. The counter was, by far, the most heavily traded for the day. New listing, Halex Holdings, also registered heavy volume. The stock racked up a sterling 20.5% gain on its debut from the initial public offering price of 78 sen.