Malaysian share prices closed 0.4 percent higher on Monday on cautious trading, with last week's gains on Wall Street and positive US home sales data failing to excite the market, dealers said. They said investors had yet to shake off their jitters following last week's market downturn prompted by the US sub-prime mortgage crisis.
The Kuala Lumpur Composite Index gained 4.75 points to 1,278.27, with gainers leading losers 531 to 315 and 266 stocks unchanged. Trading volume was 1.3 billion shares valued at 1.8 billion ringgit (517 million dollars).
"The market's upside was limited today (Monday) as investors are still cautious, and also due to a lack of fresh leads as the market has already factored in the US discount rate factor last week," said Cheah King Yoong, head of research at SJ Securities.
"The statement by the European central bank that it may raise interest rates also dampened sentiment a little as it strengthens the view that the US Fed may not cut interest rates," he added.
Cheah said he expects the local bourse to remain volatile, but predicted that it may stage a stronger recovery towards the end of the week and into next week as the market is expected to stage a pre-budget rally. Prime Minister Abdullah Ahmad Badawi is expected to present the 2008 budget to parliament on September 7.
At the close, retailer Lion Diversified led the gainers, with construction counters such as Putrajaya Perdana and Muhibbah Engineering posting strong gains.
Lion Diversified surged 55 sen or 6.2 percent to 9.50 ringgit, Putrajaya Perdana jumped 42 sen or 10.2 percent to 4.54 ringgit and Muhibbah gained 35 sen or 4.4 percent at 8.30 ringgit. Among index heavyweights, the country's largest lender Maybank was down 10 sen at 11.50 ringgit, national power company Tenaga also shed 10 sen to 10.20 ringgit, while state-run Telekom Malaysia was down five sen at 9.85 ringgit.
National carrier Malaysia Airlines posted a 10 sen increase, or 2.1 percent to 4.80 ringgit after positive second quarter results in which it reported a net profit of 113 million ringgit against a net loss of 177 million a year earlier.