KUALA LUMPUR: Investor sentiment on the Bursa Malaysia was somewhat ambivalent on Tuesday. Mild bargain hunting, following the recent market weakness, led the benchmark KL Composite Index higher. But buying support was not all that convincing for a sustained recovery.
Indeed, market breadth tipped into the red during the day before recovering at the close. Plus, trading volume remained on the thin side. Whilst there may be some nibbling, investors are by and large still very cautious on the near to medium term outlook for the market.
There was not much in term of fresh leads for the market. On the external front, Wall Street closed flat overnight. Most investors are waiting for the outcome of the US Federal Reserve's meeting on Wednesday where it is widely expected that interest rates will be left unchanged.
This could be the most definitive signal yet that the cycle of rate cuts is at an end - interest rates have been lowered by a total of 3.25% since mid-September 2007 to the current 2%. The market will be dissecting the Fed's accompanying statements for clues on what to expect next - specifically if rates will be heading up later in the year to counter rising inflationary pressures.
Fears are also growing that the eurozone is sliding towards stagflation, low growth combined with inflation. But crude oil prices are still hovering near record high levels and weighing on economies worldwide.
The KLCI opened on a firmer footing, rising to an intra-day high of 1,204.7 points before renewed selling pressure pared gains after the break. The benchmark index eventually finished some five points higher at 1,200.3 points.
At the close, there were 11 gainers for every 10 losers. Kulim was the top gainer for the day while Widetech was the biggest loser. Volume was fairly low at less than 398 million shares. AirAsia, Mulpha and Gamuda were among the most actively traded stocks for the day.
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