KUALA LUMPUR: The FBM KLCI slipped into negative territory in early trade on Wednesday, March 2, in line with the decline with key regional markets following the weaker overnight close at Wall Street, as geopolitical factors dragged global markets.
Stocks on regional markers retreated as oil vaulted over US$116 per barrel on Wednesday as concerns rose that escalating tensions in Libya would spread in the Middle East and disrupt fuel supplies, according to Reuters.
Brent crude's dizzying 15% jump in less than two weeks has fanned worries about a stifling impact on the economic recovery, pushing investors out of stocks and sending them to relatively safe assets like gold and government bonds, it said.
The FBM KLCI fell 6.02 points to 1,496.22 at mid-morning, weighed by banking stocks and key blue chips. The index had earlier fallen to a low of 1,488.95.
Market breadth turned negative as losers thumped gainers by 444 to 63, while 171 counters traded unchanged. Volume was 227.22 million shares valued at RM177.11 million.
At the regional markets, Japan's Nikkei 225 fell 1.58% to 10,583.96, Singapore's Straits Times Index lost 0.82% to 3,042.44, Taiwan's Taiex fell 0.38% to 8,694.78, the Shanghai Composite Index down 0.28% to 2,910.71, South Korea's Kospi down 0.11% to 1,937.26 while Hong Kong's Hang Seng Index opened 1.2% lower at 23,111.71.
RHB Research Institute Sdn Bhd in its strategy update on March 2 said it expects the local market to go through a bumpy ride in the immediate term given:
(i) the gradual reversal of foreign funds out of emerging markets in favour of the developed ones due to more attractive developed market valuations and improving global economic growth expectations;
(ii) rising inflationary pressure and emerging economies behind the curve in policy tightening; and (iii) political upheavals in Middle East and North Africa, leading to rising oil prices.
Nevertheless, beyond the short-term volatility, the research house said there was still room for the market to move higher in the 2H of the year.
This was primarily predicated on the view that the global economic recovery would not be derailed and would continue to build momentum in this new growth cycle, it said, adding this would imply sustained corporate earnings growth that will continue to create shareholders' value for investors.
'Whilst we are of the view that the current market weakness may persist into the 2Q, we believe market conditions would likely improve from the 2H as investors look forward to a brighter economic prospect in 2012.
'We reiterate our view that any market pullback would present an opportunity for investors to accumulate fundamentally-robust stocks on weakness as value re-emerges,' it said.
Among the major losers this morning, RHB Capital fell 10 sen to RM7.90, HLFG nine sen to RM8.67, Public Bank six sen to RM13.04, CIMB five sen to RM8.01, AMMB four sen to RM6.29, Maybank two sen to RM8.65, while Genting lost five sen to RM10.81.
Other decliners included Far East that fell 40 sen to RM7.10, Chin Teck 23 sen RM8.50, Batu Kawan 20 sento RM15.12, Ajiya 10 sen to RM1.85, Genome 9.5 sen to 70.5 sen and Hartalega nine sen to RM5.51.
Gainers in early trade included Nilai, Cycle & Carriage, Petronas Dagangan, Cocoaland, DiGi, Plenitude and S P Setia.
Actives included Talam, Tanco, Ramunia, HWGB, SAAG and Karambunai.
Stocks on regional markers retreated as oil vaulted over US$116 per barrel on Wednesday as concerns rose that escalating tensions in Libya would spread in the Middle East and disrupt fuel supplies, according to Reuters.
Brent crude's dizzying 15% jump in less than two weeks has fanned worries about a stifling impact on the economic recovery, pushing investors out of stocks and sending them to relatively safe assets like gold and government bonds, it said.
The FBM KLCI fell 6.02 points to 1,496.22 at mid-morning, weighed by banking stocks and key blue chips. The index had earlier fallen to a low of 1,488.95.
Market breadth turned negative as losers thumped gainers by 444 to 63, while 171 counters traded unchanged. Volume was 227.22 million shares valued at RM177.11 million.
At the regional markets, Japan's Nikkei 225 fell 1.58% to 10,583.96, Singapore's Straits Times Index lost 0.82% to 3,042.44, Taiwan's Taiex fell 0.38% to 8,694.78, the Shanghai Composite Index down 0.28% to 2,910.71, South Korea's Kospi down 0.11% to 1,937.26 while Hong Kong's Hang Seng Index opened 1.2% lower at 23,111.71.
RHB Research Institute Sdn Bhd in its strategy update on March 2 said it expects the local market to go through a bumpy ride in the immediate term given:
(i) the gradual reversal of foreign funds out of emerging markets in favour of the developed ones due to more attractive developed market valuations and improving global economic growth expectations;
(ii) rising inflationary pressure and emerging economies behind the curve in policy tightening; and (iii) political upheavals in Middle East and North Africa, leading to rising oil prices.
Nevertheless, beyond the short-term volatility, the research house said there was still room for the market to move higher in the 2H of the year.
This was primarily predicated on the view that the global economic recovery would not be derailed and would continue to build momentum in this new growth cycle, it said, adding this would imply sustained corporate earnings growth that will continue to create shareholders' value for investors.
'Whilst we are of the view that the current market weakness may persist into the 2Q, we believe market conditions would likely improve from the 2H as investors look forward to a brighter economic prospect in 2012.
'We reiterate our view that any market pullback would present an opportunity for investors to accumulate fundamentally-robust stocks on weakness as value re-emerges,' it said.
Among the major losers this morning, RHB Capital fell 10 sen to RM7.90, HLFG nine sen to RM8.67, Public Bank six sen to RM13.04, CIMB five sen to RM8.01, AMMB four sen to RM6.29, Maybank two sen to RM8.65, while Genting lost five sen to RM10.81.
Other decliners included Far East that fell 40 sen to RM7.10, Chin Teck 23 sen RM8.50, Batu Kawan 20 sento RM15.12, Ajiya 10 sen to RM1.85, Genome 9.5 sen to 70.5 sen and Hartalega nine sen to RM5.51.
Gainers in early trade included Nilai, Cycle & Carriage, Petronas Dagangan, Cocoaland, DiGi, Plenitude and S P Setia.
Actives included Talam, Tanco, Ramunia, HWGB, SAAG and Karambunai.
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