KUALA LUMPUR (July 24): The FBM KLCI turned negative at mid-morning on Tuesday, in line with the retreat at most global markets as re-emerging worries over the euro zone debt crisis kept Asian and European investors on the sidelines.
At 10am, the FBM KLCI fell 4.25 points to 1,631.92.
Losers beat gainers by 252 to 116, while 242 counters traded unchanged. Volume was 145.81 million shares valued at RM150.67 million.
Meanwhile, Asian shares were mostly capped on Tuesday after the previous day's deep losses as a surge in Spain's borrowing costs, to levels seen as unsustainable, triggered alarms indebted regions could push the euro zone's fourth-largest economy to seek a bailout, according to Reuters.
The euro was not far from a two-year low against the dollar and a near 12-year low against the yen, as the single currency was undermined by Moody's Investors Service changing its ratings outlook to negative for Aaa-rated Germany, the Netherlands and Luxembourg amid Europe's ongoing debt crisis, it said.
At the regional markets, Japan’s Nikkei 225 fell 0.38% to 8,475.60, Taiwan’s Taiex lost 0.43% to 6,998.19 and South Korea’s Kospi was down 0.13% to 1,787.03.
The Shanghai Composite Index edged up 0.02% to 2,141.75 and Singapore’s Straits Times Index rose 0.68% to 3,002.65.
Meanwhile, in Hong Kong, Financial markets, schools, businesses and non-essential government services were closed after a severe typhoon hit Hong Kong on Tuesday.
BIMB Securities Research in a note Tuesday said Spain was on a sickbed requiring financial drips to a tune of more than €100 billion to recapitalise its banking system.
It said concerns of a deepening Euro crisis re-emerged following a spate of negative newsflow with regards to the region’s financial health.
The research house said fears of a contagion effect exacerbated further as many see that the progress has been too slow to contain the crisis from spreading.
In line with renewed fears, investors and traders liquidated their holdings with a hint of panic selling as the Dow Jones Industrial Average opened the week with a 240 point drop before redeeming themselves to bargain hunt and ending the day 101 points lower at 12,721, it said.
“Needless to say, European bourses were broadly lower as the flight of funds to safer haven continues to German and US treasuries with yields at record low of 1.18% and 1.42% respectively.
“Similarly, Asian markets were drowning in a sea of red following the weaker European opening and the lack of catalysts. As a result, the FBM KLCI lost 6.83 points to 1,636.17 and we expect the correction to continue with 1,630 as the next support level,” it said.
On Bursa Malaysia, Tasek led the losers at mid-morning and was down 32 sen to RM9.56, F&N fell 10 sen to RM18.18, Stonemaster 9.5 sen to 11.5 sen, CCB nine sen to RM2.98, IJM Corp, Carlsberg and Axiata fell eight sen each to RM5.12, RM12.28 and RM5.77 respectively, Goldsta seven sen to 50 sen while UMW lost six sen to RM9.87.
Metronic was the most actively traded counter with 17.1 million shares done. The stock was unchanged at 9.5 sen.
Other actives included Tanjung Offshore, Century Software, Ideal Jacobs, Ariantec, CIMB and Harvest Court.
Gainers included BAT, Panasonic, Tanjung Offshore, Nationwide, Harrisons, Keck Seng and Jaya Tiasa.