Wednesday, August 3, 2011

Asian markets extend losses on deepening global growth woes

KUALA LUMPUR: The FBM KLCI remained rooted below the 1,550-level on Wednesday, Aug 3 in line with the slump at key regional markets on fears that fiscal cutbacks by governments and slowing factory output would lead to a sustained global economic slowdown and deepen Europe's debt woes.

Tuesday's last-minute budget deal to avoid a US default brought only short-term relief as the focus moved to the impact of tighter fiscal policy on the already slowing economy, illustrated by this week's weak manufacturing data, according to Reuters.

Disappointing results from European banks -- Societe Generale becoming the latest -- also highlighted concerns the bloc's current rescue fund (EFSF) may be insufficient to stop peripheral debt problems from spreading to other countries, especially Italy and Spain, it said.

The FBM KLCI fell 0.63% or 9.75 points to 1,545.10, weighed by losses at PLANTATION [], banking, Petronas group and Genting group stocks.

Losers beat gainers by 514 to 259, while 280 counters traded unchanged. Volume was 1.17 billion shares valued at RM1.75 billion.

At the regional markets, Japan's Nikkei 225 lost 2.11% to 9,637.14, South Korea's Kospi fell 2.59% to 2,066.26, Hong Kong's Hang Seng Index lost 1.91% to 21, 992.72, Taiwan's Taiex down 1.49% to 8,456.86, Singapore's Straits Times Index fell 1.47% to 3,130.34 while the Shanghai Composite Index shed 0.03% to 2,678.48.

OSK Research director Chris Eng said that given the uncertain global situation, the Malaysian market may remain volatile for now.

'But it is still early days in August and we remain hopeful for a positive month of August given that we had already underperformed the region in July.

'For now, Malaysia is still outperforming and our call to buy the bombed out stocks is still largely correct thus far in August,' he said.

On Bursa Malaysia, among plantation-related stocks, Genting Plantations Bhd fell nine sen to RM7.81, PPB GROUP BHD [] and KL Kepong Bhd lost eight sen each to RM17.20 and RM21.66, SIME DARBY BHD [] seven sen to RM9.07 and IOI CORPORATION BHD [] six sen to RM5.09.

GENTING BHD [] lost eight sen to RM10.84, TENAGA NASIONAL BHD [] down seven sen to RM6.05, PETRONAS GAS BHD [] lost six sen to RM13.38, PETRONAS DAGANGAN BHD [] and Petronas Chemicals Group Bhd fell two sen each to RM17.24 and RM6.79 while among banking stocks, AMMB Holdings fell five sen to RM6.47, and CIMB Group Holdings and PUBLIC BANK BHD [] lost two sen each to RM8.37 and RM13.40.

SANICHI TECHNOLOGY [] BHD [] was the most actively traded counter with 58.3 million shares done. The stock added two sen to 9.5 sen.

Other actives included INGENUITY SOLUTIONS BHD [], RAMUNIA HOLDINGS BHD [], Malaysian Building Society Bhd and KNM GROUP BHD [].




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