Market closes lower on India, Greece concerns

Tags: FBM KLCI | Greece | India | interest rates

Written by Insider Asia
Monday, 22 March 2010 17:34

Share prices on Bursa Malaysia closed mixed on Monday, March 22 faring slightly better than the region, which was down sharply after a surprise 25 basis points interest rate hike by India’s central bank on Friday night.

While an interest rate hike was expected to control India’s running inflation – which hit a 16-month high of 9.9% in February 2010, it was widely expected in April 2010, and not in between policy meetings.

This move re-triggered fears that other central banks in Asia may also step up monetary tightening measures, particularly China, which also faces an inflation and asset bubble problems. China recently saw higher than expected inflation in February 2010 .

Meanwhile, investors also continue to worry over Greece’s lingering debt problems, ahead of the European Union summit on 25-26 March 2010, amid concerns over whether European countries will agree to a support package.

These concerns caused the US dollar to rise against the euro, and commodity prices to slump on Friday, which extended into Monday. Several US economic data, notably on the housing sector, are due this week and will also influence trading ahead.

While the region was mostly in the red, shares on Bursa Malaysia fell less, due to the large falls in the past week and a half.

The FBM KLCI started the day in the red, falling four points, before recovering to be in marginally positive territory in the afternoon. A last minute bout of selling, however, saw it close three points lower at 1,293.7. Declining stocks beat advancing ones by a 7-to-6 margin at the close. Trading volume improved from 575 million to 675 million shares.

Actively traded stocks include Talam, KNM, Jerneh, Measat and AEM. Major gainers include Jerneh and its warrants, Keck Seng, Measat, Fima and Supermax. Losers include Tanjong plc, LaFarge Cement, Parkson, DiGi and Ho Hup.