Friday, November 12, 2010

Asian stockmarkets fall at midday

KUALA'' LUMPUR : Asian stock indices including Malaysia's FBM KLCI fell at midday on Friday, Nov 12 as investors perceived a lack of consensus among Group of 20'' policymakers to tackle on-going global economic woes.

Key concerns include the effects of the US' quantitaitve easing which raises concerns about escalating inflation and strengthening currencies in Asian countries. Europe's economic woes have also not escaped the market limelight.

At midday, the FBM KLCI fell 0.7% or 10.41 points to 1503.29, dragged down PLANTATION [] stocks. About 853 million shares worth RM953 million changed hands, while decliners beat gainers 568 to 191.

China's equities were the biggest decliners across Asia. The CSI 300 fell 3.1% to 3401.44 while the Shanghai SE dropped 2.3% to 3076.28. Hong Kong's Hang Seng was down 1.1% to 24,426.15 while Taiwan's Taiex fell 1.2% to 8335.64.

South Korea's Kospi fell 0.6% to 1,903.91, down 0.6%. Japan's Nikkei 225 declined 1% to 9,763.64 while Australia's S&P / ASX 200 was down 0.8% to 4,692.4.'' Singapore's Straits Times dipped 0.9% to 3265.36 while Indonesia's Jakarta Composite lost 0.9% to 3709.82.

GENTING BHD [] fell after Genting Singapore's third quarter financials came in below market'' expectations.

Most active was TIME ENGINEERING BHD [] after trading of shares in its associate Timr dotCom was suspended since 10.42am today, pending a material announcement.

Genting fell 34 sen to RM10.26 while TIME Engineering rose eight sen to 52.5 sen with some 99 million shares done.

Nestle fell 40c to RM43.40, KLK shed 28 sen to RM19.92, BAT 26c to RM46.42, Tenaga 17 sen to RM8.46 and QSR 16 sen to RM5.60.

On China's outlook, Nomura International (HK) Ltd strategist Sean Darby said while recent macroeconomic data underscored a strong'' economy, inflationary pressures were building there. This, in turn, lends credence to expectations that real interest rates were going deeper into negative territory.

"The biggest risk for equities, in our view, is not formal monetary tightening but the adoption of price controls to cool domestic inflation. This arbitrary way of controlling prices is very much in line with a command-style economy, but is certainly not equity market friendly," Darby wrote in a note today.

In Malaysia, MIMB Investment Bank expects a short-term correction in the FBM KLCI as technical indicators have weakened in tandem with the index.

"Nonetheless, the underlying up-trend remains intact so long as the lower immediate up-trend channel line remains intact," MIMB said. The research house said the FBM KLCI's correction could see the gauge testing the 1,501.77 level.


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