The Malaysia stock market has finished lower now in back-to-back sessions, retreating moiré than a dozen points or 1.3 percent along the way. The Kuala Lumpur Composite Index settled just above the 1,575-point plateau, and now investors are bracing for further damage when the market kicks off trade on Tuesday.
The global forecast for the Asian markets remains grim thanks to ongoing concerns about the political uncertainty in Greece. As political parties in Greece have failed to form a coalition government, fresh elections would mean weeks of uncertainty in the Eurozone over Greece's continued membership in the single currency zone. The downside in Asia may be limited by bargain-hunting, however, following heavy damage in the previous session. The European and U.S. markets finished firmly in the red, and the Asian bourses are tipped to open in similar fashion.
The KLCI finished modestly lower on Monday following losses among the financial shares, industrial issues and plantation stocks.
For the day, the index shed 9.24 points or 0.58 percent to finish at 1,575.08 after trading between 1,574.67 and 1,584.63. Volume was 977.743 million shares worth 1.12 billion ringgit. There were 694 decliners and 158 gainers, with 223 stocks finishing unchanged.
Among the decliners, Maybank, Sime Darby, CIMB Group, British American Tobacco, MISC, SAM Engineering, Tradewinds Plantation, MBM Resources, Ariantec Global, Compugates and Naim Indah all finished lower.
The lead from Wall Street suggests further consolidation as stocks saw considerable weakness on Monday. The losses extended a recent downward trend for the markets, which have moved lower for most of May. With Monday's losses, the major averages all ended the session at their worst closing levels in over three months.
The weakness followed lingering concerns about the political uncertainty in Greece, as the debt-plagued nation could be forced to hold a new round of elections due to lawmakers' inability to form a coalition government.
Traders also kept a close eye on developments in China, where the central bank announced over the weekend that it would lower the reserve requirement for banks by 50 basis points in a bid to inject more liquidity into the system. The move added to recent concerns about the outlook for growth in China, the world's second largest economy behind the U.S.
In corporate news, shares of Yahoo (YHOO) bucked the downtrend after the online media giant announced the resignation of CEO Scott Thompson, who left the company over a resume padding scandal. The company named Ross Levinsohn as interim CEO. Yahoo also said Fred Amoroso has been named Chairman of the Board of Directors, replacing Roy Bostock.
The major U.S. averages finished sharply lower on Monday as the Dow fell 125.25 points or 1 percent to finish at 12,695.35, while the NASDAQ dropped 31.24 points or 1.1 percent to end at 2,902.58 and the S&P 500 slid 15.04 points or 1.1 percent to 1,338.35.
For comments and feedback: editorial@rttnews.com