KUALA LUMPUR (Jan 16): Stocks fell on profit-taking in the morning session after the recent rally spurred mainly by window-dressing activity, dealers said.
Sentiment was also hit by a World Bank report, in which the bank cut its 2013 outlook for the global economy to 2.4% from its last forecast of 3% in June, blaming sluggish recovery in developed countries.
Lee Cherng Wee, senior analyst at JF Apex Research, told theedgemalaysia.com that profit-taking started several days ago but was more serious today after the KLCI rose to nearly 1,700 points earlier this month.
At 12.30pm, the KLCI had lost 4.84 points or 0.29% to 1,681.05, after dipping to as low as 1,677.98 earlier.
Volume traded was 845 million shares worth RM634 million. Losers led gainers 312 to 247, while 319 counters stayed unchanged.
Index-linked heavyweights were among the losers. These included Maybank, TM, Maxis, KLK, Sime Darby and Genting.
The top gainers included Kassets, APM, UMW, MBMR, MISC and Top Glove. The market was again dominated by penny stocks such as Patimas, Nextnation, Alam Maritim and DBE.
“Historical market patterns show that the KLCI tends to peak in January before suffering from some pre-Chinese New Year profit-taking. The market tends to ride the positive momentum generated from window-dressing and Santa rally in December before suffering from pre-CNY profit-taking,” said Lee of JF Apex Research.
Asian shares erased modest gains to edge lower today as cautious investors waited for more clues about the global growth outlook, while a pause in the yen's decline spurred profit-taking in Japanese equities after their recent rally, according to Reuters.
The MSCI's broadest index of Asia-Pacific shares outside Japan wiped out an earlier 0.2% rise to fall 0.1%.
"There's no real momentum in the market before China's fourth quarter GDP figures on Friday, so shares are likely to coast, with individual stocks aligning with earnings expectations," said Kim Sung-hwan, an analyst at Bookook Securities in Seoul.
Bank stocks pulled Australian shares up 0.3% and South Korean shares advanced 0.3%. Hong Kong shares dropped 0.3%, while Shanghai shares eased 0.3%.
Japan's benchmark Nikkei 225 shed 1.5%, sharply reversing Tuesday's rally that lifted the index to a 32-month closing high, as the yen took a break from its recent heavy selling. The weak yen has been a catalyst for the Nikkei's 24% gain over the past two months.
"It's a correction. Some exporters' gains are legitimate, but others aren't, so I am selling exporters which have gained while their fundamentals are still poor, such as Panasonic," said Makoto Kikuchi, chief executive of Myojo Asset Management in Tokyo.