Weak US data, global economic woes sink Asian equities

KUALA LUMPUR: Asian stock markets, including Bursa Malaysia, fell sharply on Friday, Aug 19 after Wall Street tumbled overnight on weak economic and employment data, sparking fears of a slide back into recession.

The FBM KLCI fell 17.77 points to 1,485.53 at 10, weighed by losses at key blue chips including Genting and CIMB.

Losers beat gainers by 475 to 64, while 122 counters traded unchanged. Volume was 216.82 million shares valued at RM394.41 million.

At the regional markets, South Korea’s Kospi tumbled 4.48% to 1,777.21, Japan’s Nikkei 225 lost 2.15% to 8,751.67, Hong Kong’s Hang Seng Index fell 2.65% to 19,485.74, the Shanghai Composite Index was down 1% to 2,533.89, Taiwan’s Taiex fell 2.93% to 7,391.64 and Singapore’s Straits Times Index lost 2.51% to 2,754.18.

Maybank Investment Bank Bhd head retail research and chief chartist Lee Cheng Hooi said that the due to the US markets’ bearish tone last night, there would be some wild trading activities to the downside for the local bourse today.

He said in a note to clients on Aug 19 that some heavy liquidation activities would persist to depress the market’s rebound from its recent 1,423.47 low.

“Sell on rallies and keep a massive cash pile for now. In the longer term, we foresee a move to 1,378.66. As the KLCI surpassed 1,495.05 this Monday, other retracement cluster levels like 1,510.27 and 1,511.91 had capped the index’s rise on Aug 16,” he said.

Lee said that as such, the FBM KLCI traced out a minor “Rising Wedge” rebound from the 1,423.47 low to the high of 1,510.54.

“We are still within the confines of the Rising Wedge pattern, which will soon see a breakdown. Why buy now when you can buy at much lower levels eventually?” he said.

Among the losers on Bursa Malaysia, PPB lost 36 sen to RM17.14, UMW 25 sen to RM7.20, Allianz, Genting and MISC 19 sen each to RM4.68, RM9.80 and RM7.12 respectively, Batu Kawan, LPI Capital, AMMB and CIMB 16 sen each to RM15.84, RM13.12, RM6.38 and RM7.99 respectively while MAHB fell 15 sen to RM6.50.

MAA was the most actively traded counter with 8.66 million shares done. The stock added two sen to 63 sen.

Other actives included Petronas Chemicals, Karambunai, CIMB, MAS, AirAsia, Kurnia Asia, DVM and AMMB.

Gainers at mid-morning included Dutch Lady, BAT, Glenealy, DiGi, Utusan, Nestle, BLD PLANTATION []s, IJM Plantations, Kheesan and Tahps.