Brace for profit taking (ext: Edge)

The surge in trading volume, underpinned by the positive market sentiment, is expected to continue on May 8 but investors should brace for profit taking on stocks which have run up sharply.

This was clearly seen in the afternoon yesterday when investors were quick to lock in gains. Of caution would also be the penny stocks which have no fresh corporate news. The pullback on Wall Street would also encourage some profit taking.

Trade data is expected to be released at midday and factors to watch would be the imports of intermediate goods which are used in the electrical and electronic goods. There has been a recovery in the global semiconductor sector and the imports data should provide a clue of manufacturers stocking up.

On the external front, investors should also monitor news flow from the US bank stress results.

Meanwhile, the country's international reserves rose to RM320.4 billion (US$87.7 billion) as at April 30 from RM320.124 billion on April 15. The increase was also in line with the surge in the equities market where the KL Composite Index rose 34.06 points from 956.68 to 990.74.