Market mixed, but FBM KLCI at fresh new year high

Written by InsiderAsia
Tuesday, 20 October 2009 17:47

Shares on Bursa Malaysia traded mixed on Tuesday, Oct 20 with negative market breadth as profit-taking activities set in for many smaller and mid-cap stocks. Nonetheless, gains in select blue chips helped lift the FBM KLCI to yet another new year-high.

The FBM KLCI was in positive territory the entire day, ending 4.3 points higher at 1,265.7. Market breadth was, however, negative with declining stocks beating advancing ones by a four-to-three ratio at the close. Volume fell slightly from 1.33 billion shares to 1.24 billion shares.

Smaller capitalised stocks continued to dominate trading but many were in the red.

Blue chips and shares of the Hong Leong group made up most of the top gainers’ list – including BAT, Hong Leong Industries, Hong Leong Financial Group, Hume and KL Kepong. Sarawak Energy was the top gainer after the Sarawak state proposed to privatise the company. Major losers included RHB Capital and IJM.

Asian stock markets were generally higher as better-than-expected US corporate earnings, notably from TECHNOLOGY [] companies, like Apple and Texas Instruments, boosted sentiment. The major Wall Street indices also touched new year-highs overnight.

The string of positive US corporate earnings has fuelled momentum on Wall Street. Meanwhile, the weakening US dollar caused crude oil to rise above US$80 a barrel.

Concerns over further weakening of the US dollar could also lead to increased portfolio inflows out of the US into Asia, where growth and currency-appreciation prospects are better.

Nonetheless, global stock markets have also risen very sharply. While many have cautioned that global stock prices may have run ahead of the recovery and the recovery ahead could look rather weak, abundant liquidity has still kept the rally running -- for now.

Going forward, investors will look towards 3Q2009 GDP data from China, the 2010 Budget proposals and the upcoming domestic earnings season for further leads.