25-04-2008: Mild profit taking

KUALA LUMPUR: Sentiment on the Bursa Malaysia stayed relatively firm Thursday although there were signs of renewed jitters. The KL Composite Index opened in positive territory and rose during the morning session. But buying momentum lost steam in the later half of the day.

Our trading pattern mirrored that in most Asian markets. Investors are nervous on news of more subprime-related losses reported by major financial institutions. Among the key markets, the Shanghai stock exchange chalked up big gains after the Chinese government slashed stamp duty on stock transactions by one-third to support flagging share prices.

In other news, crude oil prices retreated slightly from record high levels. Crude futures traded on the New York Mercantile Exchange is now hovering around US$118 per barrel after the US government reported higher crude stockpiles. The US dollar also strengthened some paring gains in commodity markets. Nonetheless, concerns over tight supplies will likely keep prices buoyant in the foreseeable future.

Rising cost of energy is straining household budgets worldwide and is a major threat to the global economy. There is already nascent evidence of a slowdown in US consumer spending, which makes up more than two-thirds of the country's economy.

Market breadth on the local bourse turned negative as the day progressed. The market has recorded solid gains in the last two consecutive weeks and could be looking at a mild correction in the coming days.

At the close, losing stocks outnumbered gaining ones by about five to four. But the KLCI gained 4.9 points to finish at 1293.1, thanks to gains by select blue chips such as Nestle, Public Bank, BAT, MISC and Tanjong plc.

Market volume was less than in the preceding day but still relatively solid at over 881 million shares. New listing, Dayang Enterprise Holdings was the day's most actively traded stock. The share closed 5.5% higher at RM1.53.