THE KL Composite Index traded higher on July 22. There was some bargain hunting, including for plantations stocks that have been heavily sold down in the last few days. However, the overall sentiment remains ambivalent.
Outlook for global equities is still clouded. The relevant bellwether indices in key Asian markets mostly ended marginally lower on July 22. Meanwhile, US stocks closed mixed overnight. Investors are uneasy over the outlook for corporate earnings going forward.
Recent prognosis on the US economy did not offer much for the market to cheer about. A quick recovery in 2H08 is looking increasingly unlikely. Indeed, earnings guidance from big companies such as American Express, Apple and Texas Instrument is very cautious. The market will continue to sieve through upcoming data to see if the all-important consumer spending weakens.
Meanwhile, crude oil prices regained some lost ground after the recent sell off. Crude oil futures traded on the New York Mercantile Exchange rebound above US$131 (RM428.37) per barrel. As a result, the crude palm oil market also closed steadier. Plantation stocks including KL Kepong, Sime Darby, Kulim and PPB were among the big gainers for the day.
The KLCI opened on a firmer note and stayed in positive territory throughout the day. Select blue chip gains led the benchmark index six points higher at 1,109.6 points. On the other hand, market breadth was more ambivalent. The number of losing counters was ahead of gaining ones for much of the day. However, gainers managed to outpace losers by roughly four to three at the close.
Trading volume was thin. Less than 330 million shares changed hands, a decline from the 375 million shares traded on Monday. Among the most actively traded stocks were IOI Corp, Resorts World, Gamuda, AMMB and KNM. Investors are expected to stay on the sidelines in the near term.
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