Monday, March 7, 2011

Crude oil, geopolitics weigh on markets

KUALA LUMPUR:'' The FBM KLCI fell on Monday, March 7 as a confluence of events weighed on regional and European markets, ranging from rising crude oil prices due to the Mid-east tensions and Moody's slashing the credit rating of Greece.

The FBM KLCI closed down 0.45% or 6.87 points to 1,515.74, dragged by losses at banking and key blue chip stocks.'' The broader market was weaker with losers thumping gainers by 583 to 185, while 243 counters traded unchanged. Volume fell to 714.8 million valued at RM1.09 billion from 1.13 billion shares valued at RM1.9 billion last Friday.

Airline stocks fell as crude oil prices jumped to a 2-1/2-year peak on Monday as worries about supply disruption increased due to widening clashes in Libya, while world stocks fell on concern sustained high oil prices could hurt growth.

Japan's Nikkei 225 fell 1.76%, South Korea's Kospi lost 1.22% to 1,980.27, Taiwan's Taiex declined 0.80% to 8,713.79 and Hong Kong's Hang Seng shed 0.41% to 23,313.19.

Meanwhile, the Shanghai Composite Index jumped 1.83% to 2,996.21 and Singapore's Straits Times Index edged up 0.17% to 3,066.52.

Moody's slashed Greece's credit rating on Monday on fears the country's efforts to cut its debt will not be enough, heaping further pressure on EU leaders to ease repayment terms on its bailout loans or risk a default, according to Reuters.

The international ratings agency cut Greece's rating by three notches to B1 from Ba1 with a negative outlook, citing significant risks to the country's fiscal consolidation plan and risks of a debt restructuring.

Moody's now has the lowest rating for Greece of all the major credit agencies and is the first to classify Greek government debt as 'highly speculative'.

Meanwhile, tensions escalated as forces loyal to Muammar Gaddafi advanced on the rebel-held oil port of Ras Lanuf on Monday in a counter-attack that forced residents to flee and rebels to hide their weapons in the desert, said Reuters.

On Bursa Malaysia, banking stocks fell as HLFG lost 12 sen to 8.81, Public Bank and AMMB fell eight sen each to RM13.08 and RM6.30, Maybank three sen to RM8.77, Hong Leong Bank two sen to RM9.38 while CIMB shed one sen to RM7.99.

Genting and KLK fell eight sen each to RM10.26 and RM21.02, Sime, Tenaga and Genting Malaysia fell four sen each to RM9.13, RM6.28 and RM3.40 respectively, MISC seven sen to RM8 while Telekom lost five sen to RM3.99.

Gainers included Kulim warrants (Kulim-WC) which rose 30.5 sen to 91 sen.

Bursa Securities modified the upper limit to 91 sen from 90.5 sen earlier after the price surged 30 sen in the morning session. The warrants have hit limit up in three sessions from its reference price of five sen on Thursday.

Bursa Securities said this change was in accordance to its trading manual which states "In opening a securities under 'reserved' status, market pperations will at times be required to change the upper or lower price limit of the securities up to two bids,' it said.

Other gainers were Subur Tiasa, Panasonic, Petronas Dagangan and Hap Seng.

SAAG was the most active with 22.5 million shares done. The stock shed one sen to nine sen. Other actives included Tanco, HWGB, Olympia and DRB-Hicom.

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