Wall Street drags on Asian markets

Sentiment on the Bursa Malaysia was weaker at the start of the new week. Shares traded broadly lower right from the opening bell. On the positive note, selling pressure was limited.

It would appear that investors are still relatively confident in the market outlook although they are treading more cautiously. The local bourse will likely continue to take its cues from Wall Street and the regional markets in the coming days.

Asian equity markets dropped Monday, following the sell off in US stocks last week. The closely watched Dow Jones Industrial Average fell 4.1% in the last week alone, one of its worst-performing weeks since hitting the lows in March 2009.

Strong corporate earnings results, so far, have failed to impress the market. Whilst the majority of the industry bellwethers that have reported their 4Q09 earnings have beat analysts expectations, it appears that investors are looking for even more. As a result, the good earnings have mostly been ignored as investors turned to other developments for leads. Last week’s sell off was attributed, primarily, to uncertainties resulting from the Obama administration’s proposal to curb risk taking by financial institutions as well as China’s moves to tighten its monetary policy.

On the home front, the FBM KLCI opened weaker and stayed in negative territory. The benchmark index closed four points lower at 1,296.8. Market breadth too was in the red throughout the trading day. At the close, there were roughly eight losing stocks for every five gaining ones. Some of the notable losers were MISC-OR, MISC-09, Genting PLANTATION []s, YTL and MISC.

Market volume dropped to just over 996 million shares. This is the first time trading volume dipped below the one billion mark this year. Talam was the most actively traded counter for the day. Other actives include Focus Dynamics, IRCB, AE Multi and Pentamaster.