Monday, March 7, 2011

Asian markets start week on weaker note

KUALA LUMPUR: ''Asian markets were mostly in the red in early trade on Monday, March 7 in line with the weaker close at Wall Street last Friday, as rising crude oil prices overshadowed positive US employment data.

Crude oil prices rose to 2-1/2 year highs as worries about supply disruption increased due to deepening unrest in Libya, while Asian stocks slipped on Monday as concerns about the Middle East also weighed on equities, according to Reuters.

US crude hopped above the US$105 a barrel line to reach its highest level since September 2008 as a counter-offensive by Libya's Muammar Gaddafi against rebels raised concerns that Africa's largest biggest holder of oil reserves is sliding into civil war, it said.

The FBM KLCI fell 6.61 points to 1,516.00 at mid-morning, weighed by losses including at Genting, AMMB, KLK, MISC and Axiata.

Losers led gainers by 288 to 121, while 162 counters traded unchanged. Volume was 128.64 million shares valued at RM108.82 million.

At the regional markets, Japan's Nikkei 225 fell 1.33% to 10,551.93, Hong Kong's Hang Seng Index shed 0.14% to 23,375.42, Taiwan's Taiex declined 0.25% to 8,762.11 and South Korea's Kospi fell 0.64% to 1,991.91.

Meanwhile, the Shanghai Composite Index added 0.86% to 2,967.66 and the Singapore Straits Times Index gained 0.18% to 3,066.96

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on March 7 said post-Chinese New Year foreign hedge fund liquidation activities had caused the FBM KLCI's downward selling pressure.

As the price action on its weekly chart created a Bearish Engulfing Candle Pattern 4 weeks ago, all rebound rallies may be sold down, he said.

'The Libyan humanitarian and oil crises have caused international investors to sell stocks on rebounds.

'Likewise, local investors should do the same as well. A hawkish tone for the energy markets does not augur well for equity markets too,' he said.

Among the losers on Bursa Malaysia at mid-morning, YNH Property fell 11 sen to RM1.91, Cycle & Carriage, Genting and AMMB fell 10 sen each to RM4.65, RM10.24 and RM6.28, Mudajaya and KLK lost eight sen each to RM4.65 and RM21.02, MISC fell seven sen to RM8 and Axiata lost six sen to RM4.93.

Gainers in early trade included Nestle that added 50 sen to RM45.60, Batu Kawan rose 26 sen to RM15.46, DiGi 18 sen to RM27.80, GAB 14 sen to RM9.60, Mamee 11 sen to RM3.65, United PLANTATION []s 10 sen RM17.70, TDM eight sen to RM2.87 and YTL Cement six sen to RM4.91.

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