Friday, July 23, 2010

Markets rebound

KUALA LUMPUR: Asian markets including Bursa Malaysia closed higher on Friday, July 23, as sentiment was underpinned by the firm overnight close on Wall Street, though there was a wary eye cast on the European bank stress tests results due later in the day.

The FBM KLCI closed 9.63 points higher at 1,345.68. Turnover neared the one billion units done, at 993.351 million shares worth RM1.430 billion. Gainers beat losers 491 to 268 while 285 counters were unchanged.

"Renewed investor confidence outweighed concerns over the gloomy US economy," said a dealer, adding that blue chips like Sime Darby and CIMB helped the FBM KLCI notch nearly 10 points.

The overnight Wall Street rally perked appetite for risk despite concerns over the outcome of the stress tests on 91 European banks which would reveal loan losses. Nearly all counters gained, with the finance counter being the biggest winner followed by PLANTATION [] and industrial stocks.

The FBM Emas Index surged 60.02 points to 9,126.57, the FBM Ace Index gained 19.27 points to 3,816.01 and the FBM70 [] increased 36.48 points to 9,162.94.

The Finance Index shot up 60.50 points to 12,187.12, the INDUSTRIAL INDEX [] rose 28.07 points to 2,667.72 and the Plantation Index moved up 43.48 points to 6,380.09.

Asian stocks rose, underpinned by strong earnings from US economic bellwethers such as Caterpillar which tempered fears that the global economic recovery may be stalling.

The MSCI index of Asia-Pacific stocks outside Japan jumped about 1.5 percent. The index has shed nearly 3 percent so far this year.

A string of weak U.S. economic data in recent weeks and worries that Europe's debt crisis could derail its already fragile recovery have put heavy pressure on markets, but there are signs that investors are slowly returning to riskier assets.

Japan's Nikkei rose 2.3 percent to snap a five-day losing streak as worries about the results of European bank stress tests eased and U.S. corporate earnings boosted.

Shares in Hong Kong gained for a fourth consecutive session, rising 1.1 percent to close at a one-month high of 20,815.33.

"This looks like a sustainable rally to me now," said Conita Hung, head of equity research at Delta Asia. "We're seeing some very strong support at about 20,000, and I don't see things falling below it right now."

Hong Kong's stock market has risen almost 10 percent from a low of 18,971 hit in May. The market had been hit by worries about potential moves by Beijing to cool the Chinese economy and concern about fresh fundraising plans by the country's banks.

Agricultural Bank of China ended up 5.5 percent after Morgan Stanley raised its H-share holding by about 1 percentage point.

AgBank's Shanghai-listed shares also climbed 3 percent.

Shanghai stocks ended up 0.4 percent, a fifth session of gains to its biggest weekly increase since last December, amid signs that institutional investors remain interested in banking shares.

Gains were aided by improving liquidity in China's money market and expectations for an easing of government curbs on the property market.

Guo Yanling, analyst at Shanghai Securities, said expectations for large IPOs after AgBank had been very low, but recent new share issues had clouded the picture.

"Next week the market may show more concern; optimism from macro policy is likely to weaken," she said. - Agencies

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