Thursday, February 10, 2011

Fragile US economy, possible China rate hikes weigh on Asian markets

KUALA LUMPUR: Blue chips extended their losses at midday on Thursday, Feb 10 in line with most of its regional peers with banks, which had a strong run-up, bearing the brunt of the profit-taking.

Investors turned cautious on renewed concern the global economic conditions remained fragile with unemployment still high in the US and possibility of further rate hikes in China.

At 12.30pm, the FBM KLCI fell 1% or 15.35 points to 1,520.72 at the mid-day break, weighed by losses at banking stocks and blue chips. Losers beat gainers 506 to 212, while 271 counters traded unchanged. Volume was 1.15 billion shares valued at RM1.24 billion.

The ringgit weakened 0.15% to 3.0420 versus the US dollar; crude palm oil for the third month delivery rose RM5 per tonne to RM3,895, crude oil added 24 cents per barrel to US$86.95 and gold gained 17 cents per troy ounce to US$1,363.82.

Asian stocks failed to make much headway after US Federal Reserve chairman Ben Bernanke signalled the recovery in the world's biggest economy was still fragile and warned against sharp spending cuts, according to Reuters.

Bernanke had suggested US economic conditions were still too weak for the central bank to pull back on its vast monetary stimulus, despite a welcome drop in the jobless rate, it said.

China will announce its inflation data on Friday, and analysts said they were bracing for further tightening measures from the Republic in the near future.

Investors in Japan also remained very much on the sidelines, ahead of a three-day weekend as Friday is a national holiday.

Singapore's Straits Times Index -0.90% 3,122.28 South Korea's Kospi -0.86% 2,027.91 Taiwan's Taiex -0.76% 8,938.41 Hang Seng Index -0.74% 22,993.01 Nikkei 225 0.06% 10,611.00 Shanghai Composite Index +0.78% 2,795.80 ''


Among the major losers, AMMB fell 17 sen to RM6.28, CIMB and Maybank down 10 sen each to RM8.27 and RM8.68, RHB Capital nine sen to RM8.30 and Public Bank eight sen to RM13.06.

BAT fell RM1.30 to RM46.26, Petronas Dagangan 36 sen to RM12.20, SapuraCrest 13 sen to RM3.45, New Hoong Fatt 11 sen to 2.35.

Among PLANTATION []s, United Plantation fell 20 sen to RM16.60 and PPB 16 sen to RM16.68.

Gainers included F&N and DiGi that rose 22 sen each to RM15.72 and RM25.84. Other gainers included Ekovest, Kunsford, IGB, S P Setia, Century Software and Hartalega.

Iris Corp was the most actively traded counter with 57.6 million shares done. The stock added one sen to 22.5 sen. Other actives included Karambunai, SAAG, Talam and KUB.

Trading in the shares of MTD Capital was suspended from 9am and will resume at 2.30pm today. The company said it had received a revised takeover offer of RM11 per share by Nikvest Sdn Bhd and parties acting in concert in the takeover exercise. The group had earlier offered RM9.50 per share.

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