Market Update - 3 Oct 2012

• Wall Street ended mix on overnight trading, with the DOW -0.24%, S&P +0.09% and NASDAQ +0.21% with the prospect of a Spanish bailout played down once again by Spanish PM Rajoy

• In the US, home prices rose 0.3% mom in August (+4.6% yoy), according to the Core Logic Home Price Report. Meanwhile, the auto industry sold cars and light trucks at an annualized rate of 14.9 million, according to Autodata Corp, which is the best pace since March 2008

• RBA surprised the market with an earlier-than-expected interest rate cut by 25bps to 3.25%. The statement from RBA mentioned that commodity prices were lower, the labor market softened and inflation was low, and so there was room to cut

• Asian stocks declined amid speculation Spain will request a bailout even as Prime Minister Rajoy said there are no imminent plans to ask for aid and before the release of Chinese data on the services industries

• KLCI managed to nudge the 1650 resistance mark amidst sustained buying interest on the back of the improved risk environment. Positive comments on the economy from both the PM and BNM Governor could have had led to some support on domestic sentiment as well

• USD/MYR continues to hover around the 3.0600 level