Monday, 16 April 2012

KLCI pares down losses at mid-day break

KUALA LUMPUR (APRIL 16): The FBM KLCI pared down some of its losses at the mid-day break on Monday showing some resilience compared to its regional peers, as renewed worries about the euro zone debt crisis took a toll on investor sentiment at global markets.

The FBM KLCI fell 3.35 points to 1,599.77 at the mid-day break. The index had earlier fallen to its intra-morning low of 1,594.63.

Market breadth was weaker, with losers beating gainers by 372 to 198, while 304 counters traded unchanged. Volume was 509.4 million shares valued at RM430.95 million.

The ringgit weakened 0.55% to 3.0741 versus the greenback, crude palm oil futures for the third month delivery slipped RM10 per tonne to RM3,487, crude oil shed 76 cents per barrel to US$102.07, while gold fell US$8.75 an ounce to US$1,649.40.

Asian shares and the euro fell on Monday as a surge in Spanish government bond yields renewed concerns about the euro zone's sovereign debt crisis and undermined investor appetite for riskier assets, according to Reuters.

Spain's government bond yields jumped on Friday and the cost of insuring its debt against default hit an all-time peak as record borrowing by its banks from the European Central Bank highlighted fears about the country's finances.

At the regional markets, Japan’s Nikkei 225 fell 1.4% to 9,502.61, Hong Kong’s Hang Seng Index lost 0.69% to 20,559.00, the Shanghai Composite Index was down 0.22% to 2,353.99, Taiwan’s Taiex lost 0.77% to 7,728.06, South Korea’s Kopsi fell 0.96% to 1,989.55 and singapore’s Straits Times Index edged up 0.03% to 2,988.83.

BIMB Securities Research in a note Monday said traders were now renewing their focus on Spain’s financial position and China’s economic slowdown as the main excuses to sell down equities.

As a result, it said the Dow Jones Industrial Average fell 137 points to below the 13,000 level despite the better than expected batch of earnings from corporate USA.

The research house said European bourses wobbled across the board from Spain’s mounting debts as its 10-year treasury yield jumped to 5.98% (+0.16).

Asian equities fared better as most ended the week higher obviously before the profit takings both in the US and Europe.

“We view China’s decision to expand their trading band for its Yuan as positive showing that its economy is resilient and is able to withstand the vagaries of its currency.

“Locally, the FBM KLCI added a mere 1.85 points to 1,603 signaling that the market may be due for a consolidation and may be expedited from the weaknesses in both the US and Eurozone. We expect the index may severely test the 1,600 mark after which 1,595 would be the next support level,” it said.

ON Bursa Malaysia, Dutch Lady was the top loser and fell 30 sen to RM35.28, Amway and BAT lost 18 sen each to RM9.80 and RM54.62, HLFG doen 10 sen to RM12.34, while, Sungei Bagan, CCK, Shell, Hong Leong bank and Petronas Dagangan fell eight sen each to RM2.90, 91 sen, RM10.20, RM12.48 and RM18.72 respectively.

Ingenuity Solutions was the most actively traded counter with 51.59 million shares done. The stock was down half a sen to 9.5 sen.

Other actives included Naim Indah Corp, AWC, Ariantec, CSL, Sinotop, Hibiscus and Metronic.

Gainers included Jaya Tiasa, Tasek, Ta Ann, Subur Tiasa, BLD PLANTATION []s, Hong Leong Industries and Tradewinds Plantations.

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