Global markets fall on US, Europe woes

KUALA LUMPUR: Asian markets closed in negative territory on Monday,
July 25 as European markets mostly opened in the red on the back of
Moody’s Investors Service cut Greece’s credit rating by three notches.

Investor sentiment that was already rattled by an imminent US debt
default was shaken further by the fall in the China and Hong Kong
markets as railway-related issues plunged following the train crash in
China.

On Bursa Malaysia, the FBM KLCI fell 0.35% to close at 1,559.60.
Market breadth was negative with 505 losers, 203 gainers and 291
counters unchanged. Volume was 857.42 million shares valued at RM1.36
billion.

At the regional markets, the Shanghai Composite Index slumped 2.96%
to 2,688.75, South Korea’s Kospi lost 0.96% to 2,150.48, Taiwan’s Taiex
fell 0.93% to 8,683.51, Japan’s Nikkei 225 lost 0.81% to 10,050.01, Hong
Kong’s Hang Seng Index shed 0.68% to 22,293.29 and Singapore’s Straits
Times Index down 0.36% to 3,171.55.

Royal Bank of Scotland strategists said the evolution of the
periphery crisis would continue to be a driving theme for markets this
week, in particular assimilating the policy measures delivered last week
at the Heads of State meeting in Europe on Thursday.

It said that while the political will of some countries to get
private sector involvement (PSI) at any cost won the day, there would be
of negative side effects for the evolution of the crisis (rating
downgrades for Greece and potentially other countries, ECB requirement
for additional guarantees for Greek collateral, market perception that
PSI might be a template for other countries), while bringing no
substantial economic benefits.

“Also, enhanced flexibility was provided to the European Financial Stability Facility
(EFSF) via a number of new tools, including the possibility to
recapitalise banks and to implement a bond-buying programme in the
secondary severing bond market.

“However, in our view, a key limitation of the announcement is that
it did not address the size of the EFSF and it remains too small for the
effectiveness of its expanded scope to be credible,” it said in a note
July 25.

Also to note are the key events this week including the US and the UK
preliminary Q2 GDP releases, among the first information about GDP in
Q2 in the western world, it said.

On Bursa Malaysia, DRB Hicom was the top loser and fell 33 sen to
RM1.95; Genting lost 22 sen to RM10.50, Sindora 21 sen to RM2.39, MMHE
and Latexx 20 sen each to RM7.99 and RM1.98, Harrisons 19 sen to RM3.60,
CI Holdings 18 sen to RM4.43, Latexx warrants 17 sen to RM1.54 while
LPI Capital and HLFG lost 16 sen each to RM13.60 and RM13.22.

Newly-listed Hibiscus Petroleum Bhd’s warrants and shares were
actively traded today. The warrants rose one sen to 13.5 sen with 49.8
million units done while the shares fell 9.5 sen to 53 sen.

Other actives included Ingenuity Solutions shares and warrants, Bumi Armada, CIMB, Jotech, Palette and Wijaya.

Among the gainers, KLK added 20 sen to RM21.70, Genting PLANTATION []s 17 sen to RM7.94, Shell 16 sen to RM10.46, Iretex 15 sen to RM1.20 and Petronas Dagangan up 14 sen to RM17.98