KUALA LUMPUR (Nov 6): The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) was forced below its support level in late trade as heavy jittery selling ahead of US presidential election and local factors brought down blue chips.
Large cap consumer stocks such as Nestlé (M) Bhd, Dutch Lady Milk Industries Bhd and British American Tobacco (M) Bhd were the three top losers on Bursa Malaysia, with a 3.06%, 3.71% and 2.21% drop in their respective share prices.
Banks were also hammered by the heavy sell down, which analysts said was due to global market jittery brought about by United States Presidential Election, as well as the talk of no more dollar printing by the Federal Reserve until the end of chairman Ben Bernanke's tenure.
Public Bank Bhd, Public Bank (foreign) and Hong Leong Bank Bhd, were down by 1.54%, 1.80% and 1.77% respectively in late trades.
"The sentiment in the global market today was affected by the US Presidential election which will be held for the first round starting tonight. With the encouraging economic data coming from the US, and talk of no more quantitative easing to be undertaken under Bernanke, the global market is correcting," said Dr Nazri Khan, head of retail research of Affin Investment Bank.
On the local front, profit taking by investors before the year ends also contributed to the fall of the FBM KLCI, he added.
Nazri said during the end of the year cycle, investors will be taking out their money in big cap stocks and invest in small cap stocks, as can be seen in the more resilient lower liners today.
Century Logistics Holdings Bhd increased by 8.33% to RM1.95, Grand Central Enterprises Bhd up 18.06% to 85 sen, while Sunchirin Industries (M) Bhd added 6.00% to RM1.59, to be among the top gainers on Bursa Malaysia today.
The rich valuation of telco stocks such as Maxis Bhd, DiGi.Com Bhd and Axiata Group Bhd also prompted investors to take profit.
Bearish sentiment made its way starting on Nov 2, 2012, when the benchmark index dropped to around 1,656.13 points, from the all- time high of 1,675.69 a day earlier, noted a technical analyst with Alliance Research.
Maxis, DiGi and Axiata lost by 2.75%, 1.79% and 2.33% today, as they all trade in the range of between 20 times to 29 times, which is at a premium over the FBM KLCI's 14.78 times earnings currently.
"Investors lost confidence in the equity market when the FBM KLCI dropped below the immediate support level of 1,645 points. I think the market will see a technical rebound if the index falls further to 1,620 points," said the analyst.