THE local stock market fell back yesterday with the KLSE Composite Index (CI) shedding seven points or 0.97% to finish at 683 but analysts and fund managers saw this as a “healthy consolidation” before the benchmark index resumes its march past the psychological 700-point barrier.
After reaching an intra-day high of 690 points earlier in morning trade, the CI retreated to a day's low of 681 before finishing slightly higher at 683. Total volume traded amounted to 505.42 million shares valued at RM624mil.
TA Unit Trust Management Bhd general manager of investment Mohd Haznul Mohd Ismail said investors took profit yesterday after earlier gains, and that trading positions had also been squared after last Wednesday's heavy trade in mainly small-cap stocks, volume touching 900 million shares on that day.
Among the most actively traded stocks yesterday were Menang Corp (M) Bhd and Sitt Tatt Bhd. Menang fell 2.5 sen to 50 sen, and Sitt Tatt slipped nine sen to RM1.56.
One of the biggest winners of the day, however, was second board oil and gas engineering specialist, SCOMI GROUP BHD, which piled on 36 sen to RM3.06. Listed slightly over a month ago at an initial offering price of RM1.38, Scomi has had a scorching run thus far, with yesterday's bumper rise fuelled by rumours that it had clinched a new multi-million ringgit contract.
Looking ahead, Mayban Securities equity analyst Raja Indera Putra Raja Ismail said that the CI, having risen from 637 before the introduction of the economic stimulus package on May 21 to 690 points on Friday, was well supported at the 670 to 680 range.
Based on the current liquidity, Haznul is of the opinion that the CI would have no difficulty breaking past the 700 mark, possibly as early as the end of the week.
But to drive the market further, analysts said an injection of “fresh news” – whether in the form of economic data or corporate news – was needed.
Indera thinks the KLSE is likely to take the lead from the US markets, but said this week's Umno general assembly could spark further retail interest.
He added: “The more the market has risen, the more investors will look for data to confirm their beliefs. And now that the economic package has been announced, much also depends on whether it delivers in the months ahead.”