Intra-Day MSO 28/5/2009 1230 (Thursday)

Asian stocks fell, led by banks and mining companies, after Australia & New Zealand Banking Group Ltd. sold shares and metal prices declined. Regional markets also pressed by Dow Jones overnight fall due to rising yields on U.S. government debt. Higher yields could push up borrowing costs and choke off a potential recovery in the world's largest economy.

At the break, Japan market eked up 0.30%, Singapore down 0.57%. Hong Kong and Chinese markets were closed for the Dragon Boat Festival holiday.

Stocks on Bursa Malaysia remained in the doldrums following news that the economy contracted 6.2% in the first quarter, worse-than-expected.

However, OSK Investment Bank, in a report, said the steeper economic decline would have a limited impact on earnings of listed companies.

“The sharp fall in the mining sector will only have a direct impact to Petronas, which remains committed to its capex, thus limited indirect or lagged impact to the listed oil and gas players,” it said.

The double digit contraction in manufacturing, while reflecting the tough conditions on the electrical and electronic companies in Penang, would have little bearing on the broader market as these firms are skewed towards multinationals. The research house believed investors were “looking ahead to the economic recovery in 2010.”

This morning, KLCI tumbled immediately after the bell and kept on sliding but ended above its low at 1,040.53 lost 7.15 pts or 0.68%. Volume reduced by 97 mln shares to 640 mln shares when compares with yesterday’s break.

The Intra-Day Sentiment Oscillator followed the Index tumbled to as low as -972.44 but buying before the break pushed it higher to cut its Average. Unfortunately, volume was not notably. The Oscillator ended at -874.60 gained 45.88 points when compares with -828.72, the starting point.

This afternoon, market will be improving as other Asian markets have shown recovery. Local investors should have digested the bad news on GDP and looking ahead to a better future though sentiment remains cautious. (Constructed and shared by Smartbiz)