KUALA LUMPUR: The local stock market started on a tentative note on May 20 following the weaker close on Wall Street and cautious key regional markets.

However, fund buying on big capitalised stocks and plantation stocks helped push the KL Composite Index to the highest close since September.

The KLCI ended the day 19.14 points higher at 1,042.63. Turnover was 1.87 billion shares valued at RM1.86 billion. The number of advancing counters was slightly higher than the decliners at 358 to 307 as penny stocks came under some profit taking.

The KLCI was the best performer among the key regional markets.Japan's economy contracted a record 4.0% in the first quarter as domestic demand and investment fell and put cold water over hopes of a export-led rebound in the second half.

Any recovery depends on whether Japanese exporters, who have begun replenishing depleted inventory, see demand picking up in Western markets. Investors will also want to see whether Tokyo's US$160 billion stimulus plan can pull consumption at home back from the brink.

At Bursa, funds resumed their buying of big caps and plantations. The firm crude palm oil futures also lent support.

The gainers were KL Kepong, PPB, United Plantations, Sime Darby and Asiatic. Maybank and Axiata also rose in active trade.

Moody’s announcement that nine Malaysian banks were under review for a possible downgrade did not dent investors’ sentiment.

Companies related to the Iskandar Malaysia development saw active trade, including Tebrau Teguh and MRCB.

Water-related counters in Selangor saw active trade ahead of the meeting between the Selangor state government and federal government to work out the restructuring plan. Among the stocks were pipe-maker JAKS, KPS and Puncak Niaga.

But most of penny stocks on the very active list were in the red as traders locked in their gains.