KLCI year-to-date gains wiped out

KUALA LUMPUR: The FBM KLCI’s year-to-date gains were wiped out on Monday, Aug 8 as the index tumbled more than 3% while some key Asian markets fell more than 5% following the downgrade of US’ credit rating.

Asian markets were also rattled on Standard & Poor’s statement that a new global financial crisis would hit Asia harder than the last one, especially nations heavily exposed to offshore markets or still repairing budgets from the 2008-2009 crisis.

S &P cut the long-term US credit rating by one notch to AA-plus on Friday on concerns about the government's budget deficit and rising debt burden, causing the free fall at Asian markets.

At 12.30pm, the KLCI fell 3.06% or 46.63 points to 1,477.80, its steepest single day fall since Oct 28, 2008, and to the lowest level since Oct 6, 2010. Year-to-date, the FBM KLCI has now lost more than 2.5%.

Losers hammered gainers by 1,091 to 31, while 44 counters traded unchanged. Volume was 1.11 billion shares valued at RM1.78 billion.

The ringgit weakened 0.20% to 3.0180 versus the US dollar; crude palm oil futures for third month delivery fell RM37 per tonne to RM3,007, crude oil lost US$3.28 per barrel to US$83.60 while gold soared US$38.10 an ounce to a record US$1,701.90.

At the regional markets, Japan’s Nikkei 225 fell 2.54% to 9,063.22, Hong Kong’s Hang Seng Index down 4.04% to 20,100.20, the Shanghai Composite Index lost 3.68% to 2,529.88, Taiwan’s Taiex fell 5.08% to 7,453.95, South Korea’s Kospi lost 5.17% to 1,843.30 and Singapore’s Straits Times Index was down 4.33% to 2,865.01.

Maybank Investment Bank Bhd’s Wong Chew Hann said global equities were likely to remain weak with further downside risks as investors grapple with a potential double-dip in the US economy which will staunt global growth - yet again.

Last Friday's Standard & Poor's downgrade of US' credit rating to AA+ from AAA, coupled with a negative outlook warning will spook markets further, she said in a strategy note Aug 8.

“Although Malaysian corporates are fundamentally sound, the Malaysian bourse is prone to more downside from foreign selling after four consecutive months of net buying. The rest of the world is catching a cold after a hard sneeze at the Dow last week,” she said.

At Bursa Malaysia, Dutch Lady and Batu Kawan fell 82 sen each to RM17.88 and RM15.38, Panasonic and Petronas Dagangan lost 76 sen each to RM23.24 and RM16.44, United Plantations 72 sen to RM18.90, MMHE 65 sen to RM6.86, KLK 64 sen to RM20.90, HLFG 60 sen to RM12.10, LPI Capital 56 sen to RM12.94 and F&N 52 sen to RM18.38.

Axiata was the most active traded with 31.56 million shares. The stock fell 13 sen to RM4.94. Other actives included UEM Land, Karambunai, Petronas Chemicals, Bumi Armada, Talam, CIMB, Compugates and Dialog. Gainers included MTD ACPI, BAT and MISC.