The Malaysia stock market has moved lower now in three straight sessions, shedding almost 10 points or 0.6 percent along the way. The Kuala Lumpur Composite Index finished just above the 1,635-point plateau, and now traders are bracing for another soft start when the market kicks off trade on Tuesday.
The global forecast for the Asian markets remains broadly negative thanks to increasing concerns over Europe, although the losses may be pared by bargain hunting following the heavy damage suffered in the previous session. Spain announced a ban on short sales of stocks for three months, while Italy banned short sales of stocks in the financial sector for one week. The European and U.S. markets were sharply lower, and the Asian bourses are tipped to open in the red again.
The KLCI finished modestly lower on Monday following losses from the financial shares, industrial issues and plantation stocks.
For the day, the index dipped 6.83 points or 0.42 percent to finish at 1,636.17 after trading between 1,635.12 and 1,643.33. Volume was 915.89 million shares worth 1.22 billion ringgit. There were 565 decliners and 194 gainers, with 312 stocks finishing unchanged.
Among the actives, CIMB Group, DBE Gurney Resources, United Plantation and Panasonic Manufacturing all finished lower, while Sime Darby and Naim Indah were unchanged and Maybank, Harvest Court, British American Tobacco, Allianz Malaysia and Lafarge Malayan ended lower.
The lead from Wall Street remains brutal as stocks regained some ground over the course of the session after moving sharply lower at the start of trading on Monday, but still ended the day firmly in the red. The sell-off came as worries about the ongoing European debt crisis resurfaced amid indications that Spain may require a full bailout.
Contributing to the worries about Spain, the country's central bank said Spanish GDP fell by 0.4 percent in the second quarter following a 0.3 percent contraction in the first quarter.
Traders also expressed concerns about developments in Greece, with officials from the country's troika of international creditors due to visit Athens on Tuesday to review the progress Greece has made with respect to enacting reforms and austerity measures. The International Monetary Fund reportedly does not want to provide Greece with any additional financing.
The focus on Europe came amid a lack of major U.S. economic data. Nonetheless, some traders used the initial weakness on Wall Street as an opportunity to pick up stocks at reduced levels, contributing to the recovery attempt by the broader markets.
Among individual stocks, shares of McDonald's (MCD) came under pressure after the fast food giant reported second quarter earnings that fell year-over-year. McDonald's fell by 2.9 percent, pulling back further off last Thursday's two-month closing high.
The major averages moved roughly sideways going into the close of trading, stuck firmly in negative territory. The Dow fell 101.11 points or 0.8 percent to finish at 12,721.46, while the NASDAQ slid 35.15 points or 1.2 percent to end at 2,890.15 and the S&P 500 dropped 12.14 points or 0.9 percent to 1,350.52.
In economic news, Malaysia's unemployment rate came in at 3 percent in May, the Department of Statistics said on Monday, unchanged from the previous month. The jobless rate also matched May 2011. The number of unemployed persons in the country, meanwhile, declined to around 380,200 in May from about 383,900 in April.
On a seasonally adjusted basis, the jobless rate was 3.1 percent in May, slightly higher than the previous month's 3 percent. The seasonally adjusted figure was unchanged from a year earlier.
by RTT Staff Writer
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