Lower liners hog investor interest

KUALA LUMPUR: Asian stock markets started the new week on a somewhat ambivalent note. Shares mostly traded within narrow price bands, as investors took stock of hefty gains from the two-month old rally and looked for clues as to the markets' next move.

Bellwether indices in Japan, Taiwan and South Korea closed higher, but the Singapore market ended lower on profit taking. Hong Kong shares rose early in the day, but also succumbed to profit taking near the close.

Shares on the local bourse, too, traded mixed on Monday. The KL Composite Index opened on a stronger footing, rising as high as 1,034.4 points in the early hours of trading. The benchmark index then slipped into the red after the break, but managed close off its intra-day lows at 1,025.5 points.

Market breadth managed to stay in positive territory throughout although the ratio of gainers to losers deteriorated towards the later part of the day. There were roughly five gaining stocks for every four losing ones at the close.

Trading volume, on the other hand, hit fresh high for the year. More than 3.85 billion shares worth RM2.35 billion changed hands. Much of the investor interest remains focused on lower liner stocks. Some of the most heavily traded counters include KNM, Talam, PDZ, SAAG and Ramunia.

Investors will continue to look for fresh leads on the global market's immediate outlook. In particular, investors will be on the look out for US retail sales report for April later this week.

Last Friday, the US reported lower than expected job losses in April. But unemployment has now risen to 8.9%, the highest in more than a quarter century. Although investors breathed easier at the better than expected figure, it still underscores an increasingly tough job market and casts some doubt over the pace and sustainability of a recovery in consumer spending.

Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.