KUALA LUMPUR (Jan 16): The FBM KLCI extended its losses on Monday and fell below the 1,510-point level in line with the overall weaker investor sentiment at key regional markets following Standard & Poor’s cutting the sovereign credit rating of nine of the euro zone's 17 countries.
The FBM KLCI fell 14.01 points to 1,509.06.
Losers beat gainers by 542 to 207, while 289 counters traded unchanged. Volume was 1.44 billion shares valued at RM1.36 billion.
Meanwhile, European stocks pared early losses and turned flat in morning trade as gains in defensive shares offset a drop in banking stocks following a mass credit rating downgrade by S&P of euro zone countries, according to Reuters.
The US markets are closed on Monday to observe the Martin Luther King Jr Day holiday.
At the regional markets, the Shanghai Composite Index fell 1.71% to 2,206.19, Japan’s Nikkei 225 lost 1.43% to 8,378.36, Taiwan’s Taiex was down 1.09% to 7,103.62, Hong Kong’s Hang Seng Index fell 1% to 19,012.20, South Korea’s Kospi shed 0.87% to 1,859.27 and Singapore’s Straits Times Index lost 1.26% to 2,756.49.
Royal Bank of Scotland analysts said that overall, while the market impact of the downgrades was unlikely to be very significant in the short term, they serve as a stark reminder that the euro area sovereign crisis is here to stay.
In a note Jan 16, the analysts said that more importantly, these downgrades were likely to solidify expectations that neither the EFSF nor the ESM will be able to maintain their AAA rating.
“This in turn is likely to make any significant increase in the lending capacity of either institution more difficult.
“We continue to expect the crisis to deepen eventually leading to further widening in spreads across countries vis-à-vis Germany,” they said.
On Bursa Malaysia, BAT was the top loser and fell 46 sen to RM49.30; Genting lost 32 sen to RM10.56, Dutch Lady and GAB down 28 sen each to RM25.50 and RM11.70, F&N down 22 sen to RM18.68, Batu Kawan 20 sen to RM18.60, Petronas Dagangan and UMW 18 sen each to RM17.22 and RM6.81, while Parkson and Genting PLANTATION []s fell 17 sen each to RM5.53 and RM8.94.
Compugates was the most actively traded counter with 157.2 million shares done. The stock added one sen to 8 sen.
Other actives included UOA Development, Hovid, Asia Media, CIMB and RedTone.
Among the gainers, Maybulk rose 23 sen to RM2.11, Eupe and GUH 18 sen each to 63 sen and RM1.38, UOA Development 17 sen to RM1.58, Can-One 14 sen to RM2.02, Tasek and Far East up 10 sen each to RM8 and RM7, while SHL and Kian Joo added nine sen each to RM1.30 and RM2.25.
The FBM KLCI fell 14.01 points to 1,509.06.
Losers beat gainers by 542 to 207, while 289 counters traded unchanged. Volume was 1.44 billion shares valued at RM1.36 billion.
Meanwhile, European stocks pared early losses and turned flat in morning trade as gains in defensive shares offset a drop in banking stocks following a mass credit rating downgrade by S&P of euro zone countries, according to Reuters.
The US markets are closed on Monday to observe the Martin Luther King Jr Day holiday.
At the regional markets, the Shanghai Composite Index fell 1.71% to 2,206.19, Japan’s Nikkei 225 lost 1.43% to 8,378.36, Taiwan’s Taiex was down 1.09% to 7,103.62, Hong Kong’s Hang Seng Index fell 1% to 19,012.20, South Korea’s Kospi shed 0.87% to 1,859.27 and Singapore’s Straits Times Index lost 1.26% to 2,756.49.
Royal Bank of Scotland analysts said that overall, while the market impact of the downgrades was unlikely to be very significant in the short term, they serve as a stark reminder that the euro area sovereign crisis is here to stay.
In a note Jan 16, the analysts said that more importantly, these downgrades were likely to solidify expectations that neither the EFSF nor the ESM will be able to maintain their AAA rating.
“This in turn is likely to make any significant increase in the lending capacity of either institution more difficult.
“We continue to expect the crisis to deepen eventually leading to further widening in spreads across countries vis-à-vis Germany,” they said.
On Bursa Malaysia, BAT was the top loser and fell 46 sen to RM49.30; Genting lost 32 sen to RM10.56, Dutch Lady and GAB down 28 sen each to RM25.50 and RM11.70, F&N down 22 sen to RM18.68, Batu Kawan 20 sen to RM18.60, Petronas Dagangan and UMW 18 sen each to RM17.22 and RM6.81, while Parkson and Genting PLANTATION []s fell 17 sen each to RM5.53 and RM8.94.
Compugates was the most actively traded counter with 157.2 million shares done. The stock added one sen to 8 sen.
Other actives included UOA Development, Hovid, Asia Media, CIMB and RedTone.
Among the gainers, Maybulk rose 23 sen to RM2.11, Eupe and GUH 18 sen each to 63 sen and RM1.38, UOA Development 17 sen to RM1.58, Can-One 14 sen to RM2.02, Tasek and Far East up 10 sen each to RM8 and RM7, while SHL and Kian Joo added nine sen each to RM1.30 and RM2.25.
