Malaysia Stock Market May Reverse Wednesday’s Losses

The Malaysia stock market headed south again on Wednesday, one day after snapping the five-day losing streak in which it had dropped more than 25 points or 1.6 percent. The Kuala Lumpur Composite Index now sits just beneath the 1,640-point plateau although it figures to rebound on Thursday.

The global forecast for the Asian markets is upbeat on optimism over the outlook for interest rates. The European markets were mixed and the U.S. bourses were up and the Asian markets figure to follow the latter lead.

The KLCI finished sharply lower on Wednesday following losses from the plantation stocks and mixed performances from the financial shares and telecoms.

For the day, the index retreated 20.55 points or 1.24 percent to finish at 1,639.80 after trading between 1,638.90 and 1,654.38.

Among the actives, Axiata tanked 1.98 percent, while Celcomdigi jumped 1.62 percent, CIMB Group plummeted 2.59 percent, Genting surrendered 1.90 percent, Genting Malaysia sank 1.23 percent, IHH Healthcare declined 1.60 percent, IOI Corporation eased 0.52 percent, Kuala Lumpur Kepong stumbled 1.70 percent, Maybank collected 0.28 percent, MISC shed 1.14 percent, MRDIY fell 1.00 percent, Petronas Chemicals and Nestle Malaysia both slumped 1.47 percent, PPB Group dropped 1.26 percent, Press Metal perked 0.22 percent, Public Bank plunged 2.29 percent, RHB Capital skidded 1.27 percent, Sime Darby retreated 1.74 percent, SD Guthrie lost 1.10 percent, Sunway tumbled 1.75 percent, Telekom Malaysia advanced 0.61 percent, Tenaga Nasional gained 0.27 percent, YTL Corporation was down 0.83 percent, YTL Power added 0.59 percent and Maxis and QL Resources were unchanged.

The lead from Wall Street is positive as the major averages shook off early weakness and trended steadily higher throughout the day, ending near session highs.

The Dow climbed 124.75 points or 0.31 percent to finish at 40,861.71, while the NASDAQ surged 369.65 points or 2.17 percent to end at 17,395.53 and the S&P 500 rallied 58.61 points or 1.07 percent to close at 5,554.13.

The early sell-off on Wall Street followed the release of the Labor Department’s closely watched consumer price inflation report for August.

While the report showed consumer prices increased in line with economist estimates, core consumer prices rose slightly more than expected.

Stocks moved sharply lower as the data seemingly reduced the chances that the Federal Reserve may cut interest rates by 50 basis points next week. But selling pressure waned dramatically over the course session as the Fed is still expected to continue lowering rates in the coming months.

Crude oil prices surged higher on Wednesday, recovering from a three-year low in the previous session thanks to fears of prolonged production shutdowns in the offshore oil patch due to Hurricane Francine. West Texas Intermediate Crude oil futures for October ended up by $1.56 or 2.37 percent at $67.31 a barrel.