Bursa Malaysia Index up due to mild bargain hunting

KUALA LUMPUR: Share prices on the Bursa Malaysia traded on a firmer footing Wednesday. After chalking up eight consecutive days of losses, the KL Composite Index finally regained some lost ground.

Sentiment was more positive on the back of Wall Street's overnight gains. The Dow Jones Industrial Average was up by some 150 points. Investor confidence was bolstered by the drop in crude oil and commodities prices, which eased inflationary fears.

Shares, battered by negative developments over the past two weeks, have also fallen to more attractive price levels. That encouraged some mild bargain hunting. Select blue chip stock gains led the KLCI sharply higher.

Having said that, the worst does not appear over, yet. Investor confidence remains in a very fragile state and is vulnerable to more volatility. Indeed, market volume on Wednesday was relatively thin. Less than 387 million shares changed hands. This suggests that while there is some nibbling, investors are far from convinced that gains can be sustained.

The same can be said for oil prices. Crude oil futures traded on the New York Mercantile Exchange rose again Wednesday after having fallen back to about US$136 per barrel in the previous two days. Iran's test-firing of missiles renewed fears of supply disruptions at a time when global inventory is very tight.

The KLCI added almost 19 points to close at 1,139.8 points. Among the big gainers were Tanjong plc, MISC-foreign, Tenaga Nasional, Genting, IJM, Bursa Malaysia and Bumiputra Commerce. Market breadth was in positive territory through the trading day. At the close, gaining stocks outnumbered losing ones by a ratio of roughly two to one.

AirAsia was the most actively traded counter for the day. The stock gained 2 sen to 84.5 sen. Other actives include IOI Corp, Gamuda, Resorts World and Scomi. Panasonic Malaysia was the day's biggest loser.