KUALA LUMPUR: The FBM KLCI fell below the 1,580-level for the first time in a week as global markets slumped on Tuesday, July 12 on concerns that the euro zone debt crisis could be spreading to Italy and Spain.
In a bid to keep Italy and Spain from the same fate as Greece, Portugal and Ireland, euro zone finance ministers promised on Monday cheaper loans, longer maturities and a more flexible rescue fund, according to Reuters.
But they said new measures would be announced "shortly" and set no deadline, it said.
The FBM KLCI fell 0.66% or 10.48 points to 1,578.10, weighed by losses including at banking and blue chips.
Market breadth was negative with losers thumping gainers by 602 to 167, while 288 counters traded unchanged. Volume was 832.79 million shares valued at RM1.55 billion.
At the regional markets, Hong Kong's Hang Seng Index lost 3.06% to 21,663.16, South Korea's Kospi fell 2.20% to 2,109.73, Taiwan's Taiex down 2.02% to 8,491.01, the Shanghai Composite Index declined 1.72% to 2,754.58, Japan's Nikkei 225 lost 1.43% to 9,925.92 and Singapore's Straits Times Index down 1.28% to 3,077.36
MIDF Research head Zulkifli Hamzah said that there had been a sudden increase in risk aversion among global equity investors, adding that it was not isolated to Malaysia alone.
'It appears that there are fresh concerns that the sovereign debt situation in Europe is worsening.
'Although a valid concern, it can also be a convenient excuse for investors to take profit, especially on Asian markets, which have gained significantly in the last three weeks. ''After all, the European debt quagmire is nothing new; it is a recycled concern,' he said,
Zulkifli said that foreign investors were net sellers on Monday, the first time in 13 trading days, explaining it was due more to a sharp drop in purchases, as opposed to a spike in sales.
In this regard, the weakness of the market was somewhat exaggerated, he said.
'We do not think that the market is staring at an abyss here. Local investors have a sizeable capacity to absorb any selldown. It is only a matter valuation ' there is a level at which local investors will come in strongly --- the sharper the drop, the lower the comfort level.
'So far this week, the KLCI had only shed 15.57 points, less than 1%. It had, therefore, not been sharp drop. If global sentiment recovers quickly, support may form at around current level, which is the 2-week moving average. If sentiment deteriorates, 1,565 is the first support level that MIDF Research is looking at,' he said.
Among the losers on Bursa Malaysia, KLK fell 40 sen to RM22.40, PPB and Digi 38 sen each to RM17.30 and RM29.50, MMHE 25 sen to RM8.20, MISC 23 sen to RM7.56, Panasonic and United PLANTATION []s 20 sen each to RM24.10 and RM20.90, while Sunway City fell 17 sen to RM5.01.
Banking stocks also fell, with HLFG down 20 sen to RM13.30, Hong Leong Bank and BIMB 10 sen each to RM13.30 and RM2.31, AMMB nine sen to RM6.55, Maybank eight sen to RM8.90, AFG five sen to RM3.52, Public Bank and RHB Capital four sen each to RM13.30 and RM9, while CIMB shed one sen to RM8.81.
Nestle led the gainers and was up 50 sen to RM47.40; other gainers included Amtel that added 20.5 sen to 88 sen, CI Holdings 19 sen to RM3.70, Aeon 15 sen to RM7.38, Kencana 14 sen to RM2.94, EPIC nine sen to RM2.76, Shell eight sen to RM10.36 while Knusford and Mintye added seven sen each to RM1.72 and RM1.45.
The actives included Kencana, XDL, Axiata, DVM, Petronas Chemicals, Timecom and CIMB.
''
In a bid to keep Italy and Spain from the same fate as Greece, Portugal and Ireland, euro zone finance ministers promised on Monday cheaper loans, longer maturities and a more flexible rescue fund, according to Reuters.
But they said new measures would be announced "shortly" and set no deadline, it said.
The FBM KLCI fell 0.66% or 10.48 points to 1,578.10, weighed by losses including at banking and blue chips.
Market breadth was negative with losers thumping gainers by 602 to 167, while 288 counters traded unchanged. Volume was 832.79 million shares valued at RM1.55 billion.
At the regional markets, Hong Kong's Hang Seng Index lost 3.06% to 21,663.16, South Korea's Kospi fell 2.20% to 2,109.73, Taiwan's Taiex down 2.02% to 8,491.01, the Shanghai Composite Index declined 1.72% to 2,754.58, Japan's Nikkei 225 lost 1.43% to 9,925.92 and Singapore's Straits Times Index down 1.28% to 3,077.36
MIDF Research head Zulkifli Hamzah said that there had been a sudden increase in risk aversion among global equity investors, adding that it was not isolated to Malaysia alone.
'It appears that there are fresh concerns that the sovereign debt situation in Europe is worsening.
'Although a valid concern, it can also be a convenient excuse for investors to take profit, especially on Asian markets, which have gained significantly in the last three weeks. ''After all, the European debt quagmire is nothing new; it is a recycled concern,' he said,
Zulkifli said that foreign investors were net sellers on Monday, the first time in 13 trading days, explaining it was due more to a sharp drop in purchases, as opposed to a spike in sales.
In this regard, the weakness of the market was somewhat exaggerated, he said.
'We do not think that the market is staring at an abyss here. Local investors have a sizeable capacity to absorb any selldown. It is only a matter valuation ' there is a level at which local investors will come in strongly --- the sharper the drop, the lower the comfort level.
'So far this week, the KLCI had only shed 15.57 points, less than 1%. It had, therefore, not been sharp drop. If global sentiment recovers quickly, support may form at around current level, which is the 2-week moving average. If sentiment deteriorates, 1,565 is the first support level that MIDF Research is looking at,' he said.
Among the losers on Bursa Malaysia, KLK fell 40 sen to RM22.40, PPB and Digi 38 sen each to RM17.30 and RM29.50, MMHE 25 sen to RM8.20, MISC 23 sen to RM7.56, Panasonic and United PLANTATION []s 20 sen each to RM24.10 and RM20.90, while Sunway City fell 17 sen to RM5.01.
Banking stocks also fell, with HLFG down 20 sen to RM13.30, Hong Leong Bank and BIMB 10 sen each to RM13.30 and RM2.31, AMMB nine sen to RM6.55, Maybank eight sen to RM8.90, AFG five sen to RM3.52, Public Bank and RHB Capital four sen each to RM13.30 and RM9, while CIMB shed one sen to RM8.81.
Nestle led the gainers and was up 50 sen to RM47.40; other gainers included Amtel that added 20.5 sen to 88 sen, CI Holdings 19 sen to RM3.70, Aeon 15 sen to RM7.38, Kencana 14 sen to RM2.94, EPIC nine sen to RM2.76, Shell eight sen to RM10.36 while Knusford and Mintye added seven sen each to RM1.72 and RM1.45.
The actives included Kencana, XDL, Axiata, DVM, Petronas Chemicals, Timecom and CIMB.
''
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