KUALA LUMPUR: Wall Street's overnight rally prompted further gains for stock markets across the region on Tuesday. On Monday, the Dow Jones Industrial Average Index surged 6.8% in one of its biggest one-day gains ever.

Investors cheered the US government's moves to acquire US$1 trillion (RM3.65 trillion) of toxic assets from banks and help re-liquefy the banking system, which has been subject to a credit crunch with banks weighed down by bad loans and mounting losses.

Investors also welcomed more news in the badly battered US housing market — the source of the current recession. Sales of existing homes rose by a more than expected 5.1% pace in February 2009. This follows data last week showing housing starts surprisingly rising 22.2% in Feb 2009, after plunging 14.5% in Jan 2009.

The Malaysian stock market, however, bucked the regional uptrend to close relatively flat. This was partly due to profit-taking after the index had surged some 21.5 points on Monday. All eyes were also focused on the Umno general assembly, which started on Tuesday.

Stocks on Bursa Malaysia initially opened higher, with the KLCI rising as much as 12 points at the open. However, those gains were erased by mid-morning and the index ended the day down 0.4 of a point at 877.9 points. Market breadth was mixed, with 671 million shares changing hands.

Actively traded stocks include KNM, Resorts, IOI Corp, Genting, Zelan, MRCB and TM. Major gainers include Bumiputra-Commerce, CBIP and IOI Corp. Losers include BAT, DiGi and Malayan Banking Bhd (Maybank).

With Wall Street having built in so much expectations of a recovery later this year, investors will assess every bit of economic data to see if forthcoming statistics show a recovery or at least a moderation on declining trends. This will determine whether Wall Street's recent gains are sustainable. And that in turn, will affect the performance for Asian bourses in the near term.

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.