Market extends losses

Tags: cautious | FBM KLCI | inflation

Written by Insider Asia
Friday, 19 March 2010 18:24

Share prices on Bursa Malaysia extended their downward trend on Friday, March 19. Investors stayed cautious after the recent steep falls and as the FBM KLCI fell below the psychologically important 1,300-mark, after attempting to cling to it in the past few days.

There is also a lack of fresh domestic leads to spur interest, with investors awaiting the release of the country’s New Economic Model at the end of the month.

The FBM KLCI was marginally higher at the open, taking its cue from a positive close on Wall Street. However, it quickly slipped into negative territory and ended the day 5.3 points lower at 1,296.6. With this, the key index has lost a total of 14.6 points for the week. It closed on a positive note for only one day (Wednesday) during the entire week.

Market breadth was negative, with declining stocks beating advancing ones by a 7-to-6 margin at the close. Trading volume fell from 677 million to just 575 million shares, with many investors staying on the sidelines.

Actively traded stocks include KNM, Talam, Astro, Maybank, Measat and Nam Fatt. Major gainers include Tanjong plc, Measat and Top Glove. Losers include Kulim, Puncak Niaga, SP Setia and Hong Leong Bank.

The rest of the region fared relatively better, taking their cues from Wall Street. The Dow Jones Industrials average rose for the eighth consecutive day on Thursday, fueled by the recent spate of US economic data which continue to suggest low inflationary pressures (and with it less aggressive interest rate hike risks) amid a slow economic recovery.

Following the lack of upward pressure for US producer prices, the picture was similar for consumer prices. The CPI was unchanged in February after rising 0.2% the month before, and lower than expectations for a 0.1% rise. Core CPI, excluding volatile food and energy prices, rose 0.1% in February after falling 0.1% in January.

While inflation is tame, the growth prospects going forward will also look rather slow.

The US Conference Board’s index of leading economic indicators rose 0.1% in February, as expected, after rising 0.3% in the previous month. This was the smallest gain in 11 months. The leading indicators index forecasts economic activity in the next three to six months based on a variety of economic data.