(RTTNews) - The Malaysian stock market on Wednesday halted the modest two-day winning streak in which it had collected 9 points or 0.07 percent along the way. The Kuala Lumpur Composite Index ended just above the 1,275-point plateau, but now investors are anticipating another mild withdrawal at the opening of trade on Thursday.

The global forecast for the Asian markets is slightly pessimistic, although commodity stocks are likely to continue to provide support thanks to yet another fresh record high for the price of gold. Oil stocks also may extend gains, while technology stocks and airlines are expected to see sustained selling pressure. The European markets finished little changed and on opposite sides of the unchanged line, while the U.S. markets ended slightly lower - and the Asian markets are also tipped to trend lightly to the downside.

The KLCI finished slightly lower on Wednesday as investors locked in gains from the recent rally - particularly among the financials, plantations and industrials.

For the day, the index eased 4.85 points or 0.03 percent to finish at 1,275.10. Volume was 945.197 million shares worth 1.017 billion ringgit. There were 347 gainers and 295 decliners, with 282 stocks finishing unchanged.

Among the actives, Silver Bird, LB Aluminium, Affin, DFZ Capital, Top Glove and Nestle all finished higher, while Maybank, Tenaga Nasional and Public Bank all ended unchanged and CIMB Group, Scomi Group Loan Rights and Sime Darby ended lower.

The lead from Wall Street is mildly negative as stocks fell by slim margins on Wednesday, with worrisome data on inflation and the housing market prompting some traders to reduce their positions in equities. The major averages all closed in negative territory, although well off their worst levels of the day.

Earlier, a report from the Labor Department showed that consumer prices increased for the third consecutive month in October, with the continued price growth partly due to a notable increase in energy prices. The consumer price index increased by 0.3 percent in October following an unrevised 0.2 percent increase in September. Economists had been expecting a somewhat more modest increase of 0.2 percent.

Core consumer prices, which exclude food and energy prices, increased 0.2 percent in October, matching the increase seen in the previous month. The modest increase in core prices came in slightly above economist estimates of a 0.1 percent increase. The report raised inflation concerns among traders amid news that St. Louis Federal Reserve President James Bullard indicated that the Federal Reserve might not raise interest rates from near zero levels until 2012.

Separately, the Commerce Department reported that the rate of housing starts unexpectedly declined in October, although analysts pointed to uncertainty about the first-time home buyer tax credit as a possible reason behind the drop. Housing starts fell 10.6 percent to an annual rate of 529,000 in October from the revised September estimate of 592,000. The drop surprised economists, who had expected starts to edge up to 600,000 from the previous month’s initial estimate of 590,000.

In other news, Rep. Paul Kanjorski, D-Penn., unveiled an amendment to financial regulation reform legislation before the House Financial Services Committee aimed at ending the problem of firms that have become “too big to fail.”

Kanjorski said the plan would give federal regulators new authorities to rein in and dismantle large, interconnected firms whose unregulated failure could threaten the stability of the entire financial system.

The major averages staged a recovery attempt in late day trading but were unable to break into positive territory. The Dow fell by 11.11 points or 0.1 percent to 10,426.23, the NASDAQ dropped by 10.64 points or 0.5 percent to 2,193.14 and the S&P 500 edged down by 0.52 points or 0.1 percent to 1,109.80.

In economic news, Malaysia could return to moderately high growth in 2010, the World Bank said in a report on Wednesday. However, in the medium term, the bank said the outlook would depend on sustained global improvements and the speed with which the country implements structural reforms.

In its new report called Malaysia Economic Monitor, the World bank said the economy would contract 2.3 percent this year, but gain 4.1 percent in the next year. The country’s medium term outlook looked promising, it said, and expects the country to register a growth of 5.6 percent in 2011 and 5.9 percent in the following year.

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Posted in Categories: Eurozone, Releases, Stocks, USA.

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