Bursa Malaysia Stock Information

“Asian stocks are likely to open lower on Wednesday after U.S. markets fell for the first time in three days and oil futures retreated from recent record highs and closed down.”

This is the news reported after U.S. markets fell yesterday. Oil futures fell for the first time in five days. December crude oil futures closed down 3.4% at $90.38 a barrel on the New York Mercantile Exchange, retreating from Monday’s highest-ever close of $93.53.

Many analysts are hopeful the economy can avoid a recession, but the odds of one occurring have grown considerably since the start of this year. Some analysts, meanwhile, think there’s a chance the Fed will leave rates unchanged.

On Tuesday, Bursa Malaysia closed slightly higher, added 1.17 points to make a fresh new high at 1,412.7 points. Investors may take some profit today due to the U.S. markets fell last night and they are waiting for news about Fed decision on the rate cuts.

The Kuala Lumpur Composite Index (KLCI) breached the 1,400-level for the first time ever yesterday helped the KLCI rise for the fifth day. The index jumped 13.27 points, or one per cent, to close at 1,411.62. However the bullish momentum might not sustain for long if the oil price stay above US90. Yesterday it passed at US93 a barrel.

In the US market, the Dow rose 63 points, or 0.5%, to 13,870, while the Nasdaq gained 13 points, or 0.5%, to 2,817, and the Standard & Poor’s 500 was up 5 points, or 0.4%, to 1,540. It is widely expected that the Federal Reserve will take another whack at interest rates at its meeting Wednesday, slicing another 25 or 50 basis points off the federal funds rate and the discount rate.

Bursa Malaysia shares rallied to a fresh record yesterday by strong investor sentiment and a growing speculation that the US may cut interest rates next week to spur its slowing economy.

The benchmark Kuala Lumpur Composite Index rose 20.1 points, or 1.5 per cent, to closed at 1,398.35.

The weakness in the US dollar was one of the few major reasons of a lot of money is flowing into Asia stock market. The ringgit strengthened to a 10-year high of 3.3480 against the US dollar.

Rising share prices around the region also boosted local sentiment, despite record high crude oil prices and the sluggish performance of US stocks overnight. Hang Seng Index rose 550.73 to 30,405.22 points, Strait Times Index closed at 3,771.55, up 64.41 points. All major regional indices were up except New Zealand and Vietnam’s.

Technical Analysis

Relative Strength Index (RSI) of 68.96 consider reached over bought area. The index also touch upper band of the Bollinger. Next week we will some correction. There are rooms for the index to jump over 1400 points as US might announce interest cut next week.

Today the Kuala Lumpur Composite Index (KLCI) closed up 18.44 points or 1.4 percent at 1,378.27. Following hopes that an interest rate cut in the US at the Fed’s policy meeting next week. Trading volume was 1.53 billion shares, valued at 1.88 billion ringgit.

Yesterday, the Malaysian Institute of Economic Research (Mier) is revising downward its forecast for the country’s gross domestic productivity (GDP) growth next year to 5.4% from 5.8%, against the Government’s targeted 6%. It is, however, maintaining GDP growth for the year at 5.7%. They expected the ringgit strengthening to RM3.35 to the US dollar at year-end and perhaps to RM3 by the end of next year.

The Mier also reported that inflation had risen to 1.9% in August from 1.4% in June, mainly due to the revision in civil service salary and rising food and commodity prices. Inflation for the year is expected to average 2.2%, compared with 3.6% last year.

Today almost all regional stock markets including Bursa Malaysia affected by the big fall in Wall Street (2.64% last Friday).  At the same time oil price also jump to the highest point at more than US90 per barrel. The US sub prime mortgage issue also is the major concerned among the investors. Too many bad news. The short term of the stock market movement remain bearish.