Thursday, February 10, 2011

FBM KLCI dips more than 1% in early trade

KUALA LUMPUR: The FBM KLCI fell more than 1% in early trade on Thursday, Feb 10 and was the worst performer among the key regional bourses as Asian markets extended their losses following the interest rate hike by China on Tuesday.

The sentiment at the regional markets was also affected by the overnight mixed closing at Wall Street following US Federal Reserve chairman Ben Bernanke's statement that the US unemployment level may remain high for the next several years.

At mid-morning, the FBM KLCI fell 15.68 points to 1,520.39, weighed by losses at banking stocks and select blue chips.

Losers led gainers by 411 to 110, while 209 counters traded unchanged. Volume was 461.69 million shares valued at RM398.32 million.

At the regional markets, Taiwan's Taiex fell 0.78% to 8,936.21, Singapore's Straits Times Index lost 0.61% to 3,131.41, the Shanghai Composite Index down 0.47% to 2,760.89, South Korea's Kospi fell 0.44% to 2,036.50, Japan's Nikkei 225 shed 0.04% to 10,613.77 while Hong Kong's Hang Seng Index opened 0.4% lower at 23,069.42.

BIMB Securities Research in a note Feb 10 said based on Bernanke's statement, it continued to indicate that US employers were reluctant to hire new employee despite many signs that the economy is recovering.

'Hence, the current unemployment level of 9% may stay the same for an extended period of time.

'Given this latest negative development and the prolong impact from China upward revision in interest rate the day before, we are of the view that the local market may continue with its correction mode especially at the back of the benchmark index sterling run in the last few days,' it said.

Meanwhile, a dealer said the on-going underlying fear for now was the increasing speculation that policy makers will take further steps to curb inflation after China raised its borrowing costs.

'Thus far in the region, we have seen S.Korea, India, Indonesia, Thailand and China to have pushed up rates. This has primarily affected our market too, and the banking stocks,' he said.

On Bursa Malaysia, the top loser at mid-morning was BAT that fell RM1.36 to RM46.20.

Among banking stocks, AMMB fell 17 sen to RM6.28, Maybank 12 sen to RM8.66, CIMB 10 sen to RM8.27, RHB Capital nine sen to RM8.30 and Public Bank four sen to RM13.10.
United PLANTATION []s fell 20 sen to RM16.60, PPB 14 sen to RM16.70, MPHB 13 sen to RM2.55, Petronas Dagangan down 12 sen to RM12.44 while Guan Chong lost 11 sen to RM2.36.

Gainers included APM Automotive, MRCB, Century Software, DiGi, KLK, Coastal Contracts and IGB.

Iris was the most actively traded counter with 24.4 million shares done. The stock added half a sen to 22 sen.

Other actives included Karambunai, Talam, SAAG, Ho Wah Genting and KUB.

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