Wednesday, July 14, 2010

Key regional markets advance

KUALA LUMPUR: Asian markets rallied on Wednesday, July 14 as the strong start to the US earnings season boosted optimism that the global economic recovery was sustainable.

US stocks rallied on Tuesday after Alcoa's quarterly results heartened investors that had fled to the sidelines on jitters about the sustainability of the economic recovery, according to Reuters.

Intel posted net income of US$2.9 billion (RM9.25 billion), or 51 US cents a share, versus a net loss of US$398 million, or 7 US cents a share, in the second quarter of 2009, when Intel's results included a US$1.4 billion fine by the European Commission.

At the key regional markets this morning, Japan's Nikkei 225 jumped 2.83% to 9,807.63 points, Taiwan's Taiex Index up 1.38% to 7,702.58 points, the South Korean Kospi Index up 1.24% to 1,756.66, the Shanghai Composite Index 0.99% to 2,474.57 points, Singapore's Straits Times Index 0.77% to 2,951.32 points while Hong Kong's Hang Seng Index opened 1.4% higher at 20,706.27 points.

At Bursa Malaysia, the FBM KLCI rose 8.28 points to 1,341.15 points at 10am, lifted by gains including at Sime Darby, Tenaga and banking stocks.

Gainers thumped losers by 300 to 74, while 152 counters traded unchanged. Volume was 151.61 million shares valued at RM189.33 million.

RHB Research Institute Sdn Bhd said the FBM KLCI appeared more resilient than expected on Tuesday, in the wake of mild selling activities in the regional bourses.

In fact, based on six consecutive positive candles in the last six trading days, the benchmark stood a good chance to take out the June's 1,335.31-point high, if the buying support persists on Wednesday, it said.

"While the development on the daily turnover remains disappointing, we believe trading interests should improve slowly amid a revival of rotational trading activities amongst the lower liners of late.

"Accordingly, we expect trading volume to expand when it removes 1,335.31 points and the solid technical obstacle of 1,350 points convincingly."

The research house said that going forward, as the 10-day SMA has steadily trended upward in recent sessions, local trading sentiment should continue to improve in tandem with the increase in positive news flow from the US' quarterly earnings report in the near term.

Strong supports remain near the 10-day SMA (1,315), 40-day SMA (1,303) and the psychological level of 1,300, it said.

Among the major gainers on Bursa Malaysia this morning, Sime Darby rose 15 sen to RM7.89 after Prime Minister Datuk Seri Najib Razak maintained that the general financial position of the conglomerate was strong, amidst ongoing concerns arising from huge cost overruns incurred by the conglomerate's energy and utilities division.

IOI Corp, AMMB Holdings and RHB Capital added seven sen each to RM5.17, RM5.16 and RM6.10 respectively; Maybank up six sen to RM7.70 and CIMB two sen to RM7.15.

Public Bank, Axiata and Hong Leong Bank rose four sen each to RM12.02, RM4.17 and RM8.80, while Tenaga was up 12 sen to RM8.60.

Other major gainers this morning included KFCH, MMosaics, Kossan, BAT and PPB.

Among the losers, Petronas Dagangan and Ajinomoto fell four sen each to RM9.46 and RM4.32, Kamdar lost seven sen to 27 sen, TH PLANTATION []s and Keck Seng down five sen each to RM1.47 and RM5.15 while Tasco fell three sen to 92 sen.

Scomi Marine was the most actively traded counter with 12.39 million shares done. The counter added one sen to 50 sen.

Other actives included Nam Fatt, Scomi, SunREIT, Kenmark and Talam.


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