Tuesday, August 9, 2011

Asian markets sink deeper into the red

KUALA LUMPUR: Asian equity markets sank deeper into the red on Tuesday, Aug 9 after the overnight slump at Wall Street took its toll on already brittle investor sentiment, sparking widespread sell down that saw the Hong Kong and South Korean markets fall more than 7% each.

The FBM KLCI fell 43.98 points to 1,453.01 at 10am, as losers thumped gainers by 822 to 28, while 50 counters traded unchanged.

Volume was 444.58 million shares valued at RM747.46 million.

At the regional markets, the Hang Seng Index lost 7.35% to 18,983.97, the Kospi fell 7.70% to 1,725.42, Japan's Nikkei 225 down 4.43% to 8,694.31, Taiwan's Taiex fell 4.65% to 7,201.70 and the Shanghai Composite Index was down 3.17% to 2,446.74.

Singapore's Straits Times Index was spared the fall as the stock market is closed to observe the National Day holiday.

Maybank Investment Bank Bhd head of retail research in a note to clients Aug 9 said investors must be quick to exit any intra-day trading positions with profits.

'Else, with a very volatile market like this, there are great chances of losing capital and profits if investors are too slow to press the sell button,' he said.

Lee also said that there would be some volatile trading activities would take place on the local bourse today, with heavy profit taking and liquidation emerging later to depress the markets' rebound.

Meanwhile, strategists at The Royal Bank of Scotland said that global confidence had gone on a holiday and recent events (read S&P downgrade) are likely to keep markets squarely focused on the FOMC rate decision tomorrow.

It said in a note Aug 8 that its European economics team estimates that bond purchases to the tune of '850 billion would be required to stabilise the Italian and Spanish bond markets, an amount that is likely to strain confidence in the single currency.

'Although no change in policy is expected, the statement will take on increased importance.

'Given the importance of the Asian outlook for global growth, there is likely to be heightened scrutiny of Chinese date releases on inflation, retail sales and industrial production later today,' it said.

Among the decliners on Bursa Malaysia, BAT lost RM1.86 to RM42.74, Nestle 90 sen to RM46.70, Dutch Lady 88 sen to RM17.22, F&N and Panasonic 80 sen each to RM18 and RM22.90, KLK 72 sen to RM20.50, Batu Kawan, PPB and Petronas Gas 60 sen each to RM15, RM16.40 and RM12.30, while HLFG lost 54 sen to RM11.76.

Compugates was the most actively traded counter with 12.87 million shares done. The stock was unchanged at 6 sen. Other actives included Karambunai, E&O, SAAG, UEM Land, CIMB, Bumi Armada, Talam and Petronas Chemicals.

Gainers included Tien Wah, Shangri-La, Toyo Ink and Catcha Media.

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