CI at highest in nearly a year as Dow continues surge


By JAGDEV SINGH SIDHU

A RALLY on Wall Street that pushed the Dow Jones Industrial Average to its highest level in 14 months fuelled another strong day in Asia yesterday and, in the process, drove the KLSE Composite Index (CI) past the 730-point level to its highest in nearly a year. 

Japan's Nikkei 225 surged 1.4% to its highest since July last year while Seoul's Kospi also rose 1.4%, to a level last seen in September 2002. 

The star performer in Asia in terms of new highs was Bangkok's SET Index, which rose to a four-year high at nearly 526, after climbing for the third straight day. Singapore's Straits Times Index, however, fell 0.4% to 1,615. 

On Wall Street, the Dow's 90-point rally to 9,412 was inspired by better-than-expected earnings of building materials supplier Lowes, which suggested that consumer spending was improving. 

The Nasdaq rose 2.2% to 1,739 after an influential business magazine had a positive story on Advanced Micro Devices' new line of 64-bit microchips. 

Expectations of an economic recovery in the second half of the year had stimulated interest in equities since the SARS outbreak was formally declared over, but the recent surge was put down to positive earnings reports from corporations. 

The KLSE, which is just getting into the full swing of the current reporting season, has benefited from the external boosts, too, although some analysts point out that there is little domestic data to fundamentally boost the market. 

“We anticipate the economic momentum for the medium term is still intact,'' said Fortress Capital Asset Management chief executive officer Thomas Yong. 

“ROEs (return on equity) for corporates are rising on the back of improved capital deployment,'' he said, adding that portfolio flows were, however, slowing. 

The KLSE rebounded yesterday with both the volume and value of shares traded surging nearly 50% and 27% respectively. Small-cap stocks once again dominated the attention of investors. 

The CI rose 0.4% to 732 while the Second Board index climbed 1.15%. 

Mesdaq counters were again heavily traded but its index only managed a gain of slightly less than 1%. 

Analysts acknowledged that rotational interest was still lively and the market would be looking to the current reporting season to find fundamental reasons for the rally to continue. 

Some analysts said the stronger-than-expected financial results for the June quarter could provide an impetus for an upgrade in 2004 earnings. 

Others argued that 2004 earnings would be upgraded only if results for the July–September quarter beat estimates. 

“It is still a stock pickers' market for the rest of the year,'' Yong said. “People won't look at 2004 until the end of the year.'' 

For latest US and other markets and more foreign business news click here

 

For latest KLSE indices and other information click here

 

For Tokyo stock exchange click here

 

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
   

Did you find this article insightful?

Yes
No

Next In Business News

Top Glove predicts 3% hit on FY21 sales due to production halt �
Airlines set to lose US$157bil amid worsening slump - IATA
AirAsia looks beyond losses to travel return
CPO December contract closes lower at RM3,448
My EG posts net profit of RM70.74m in 3Q
Leong Hup International's 3Q results up on-quarter
Inari sees strong demand for 5G RF components as Q1 net profit soars
PBA 3Q net profit jumps nearly 83% to RM11.3m
Majuperak returns to profit after three consecutive loss-making quarters
UEM Sunrise posts RM28.9mil loss in Q3�

Stories You'll Enjoy