Thursday, March 10, 2011

FBM KLCI dips in early trade

KUALA LUMPUR: The FBM KLCI declined in early trade on Thursday, March 10 in line with the dip at key Asian markets following the weaker overnight close at Wall Street as surging oil prices remained a concern.

Asian shares edged lower on Thursday, weighed down by worries that a surge in oil prices could exacerbate inflation pressures in the region and cripple economic growth, according to Reuters.

US oil futures rose 0.3%, following a 2.5% jump in Brent oil late on Wednesday to US$115.94 a barrel.

Oil advanced as fighting in Libya worsened and OPEC saw no need for an emergency meeting to consider raising output. Fears that Libya's uprising could spread further in the Middle East also dented market sentiment, said Reuters.

The FBM KLCI fell 3.54 points to 1,520.15 at mid-morning. Losers led gainers by 259 to 119, while 196 counters traded unchanged. Volume was 255.24 million shares valued at RM198.56 million.

BIMB Securities Research in a note March 10 said the hanging concern over the civil unrest in Libya continued to shake sentiment as the precious commodity ended at USD104 per barrel yesterday.

Crude oil price remains at alarming rate that could derail the global economic recovery despite OPEC members' unofficial pledge to increase production in order to tame the oil price, it said.

The research house said that there was fear that the civil unrest in Middle East and North Africa which already toppled leaders in Tunisia and Egypt could spread to one of the world's largest oil producer, Saudi Arabia.

'As the world's second largest oil producer behind Russia with 264bn barrels of proven oil reserves, this chilling fact could hammer the global equity sentiment should the civil unrest erupt in the country.

'Given lack of closure of civil unrest in Middle East and added with lack of fresh catalyst, we expect the local equity market to trade in tight range today with mild upside bias,' it said.

On Bursa Malaysia, PPB was the top loser at mid-morning and fell 24 sen to RM16.96; KLK lost 16 sen to RM20.70, Glenealy 12 sen to RM4.65, Bursa nine sen to RM8.04, Apex, HLFG and Mudajaya eight sen each to 70 sen, RM8.78 and RM4.77 respectively, while Toyo Ink and SapuraCrest fell seven sen each to RM1.71 and RM3.60.

Gainers in early trade included Pos Malaysia, Petronas Dagangan, MTD Capital, Far East Corp, Top Glove, Media Chinese International (MCIL) and Ewein.

The actives included SAAG, Borneo Oil, Perisai and MCIL.

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