Market turns lower again

After a one-day recovery on Wednesday, share prices on Bursa Malaysia resumed their downtrend, although losses were minimal. Following the steep pace of declines in the past week, investors remained generally cautious, with many sidelined.

The decline on Thursday, March 18 for the FBM KLCI, marks five days of falls in the last six trading days, with the benchmark index attempting to cling to the psychologically important 1,300- mark.

Taking its cue from overnight gains on wall Street, the FBM KLCI started Thursday higher, rising as much as 5.2 points at the open. However, its gains were later pared. The index went marginally into the red in the afternoon session but closed flat at 1,301.9.

Market breadth was negative, with declining stocks beating advancing ones by a 7-to-6 margin at the close. Trading volume fell from 742 million to 677 million shares.

Actively traded stocks include Astro, Measat, Nam Fatt, KNM, Tomei, AirAsia and Dialog. Major gainers include Astro, Tanjong plc, CMSB and Petra Energy. Losers include Mitrajaua, AMMB and Top Glove. Astro soared 67 sen to RM4.23 after T Ananda Krishnan proposed to privatize it for RM8.5 billion cash or RM4.30 per share.

It was a similar picture in the region, where most markets traded mixed. Wall Street was boosted by data showing a larger than expected 0.6% fall in US producer prices in February 2010, the largest decline since July 2009. Stripping out energy and food costs, core producer prices rose by 0.1%.

This snapped a four-month increase and eased inflationary – and interest rate hike – concerns, at least for now. The Federal Reserve has pledged to hold interest rates low to help the recovery.

The Dow Jones Industrials Index has enjoyed seven days of gains and is trading at its highest level in two months. Some investors are also worried whether profit-taking activities will set in.