Oil price at US$44 and US terror alert weigh on market

CONCERN over high oil prices, warning of a terrorist attack, and weaker-than-expected US economic data sent stocks on Bursa Malaysia lower, and the Kuala Lumpur Composite Index (KLCI) to its lowest point in a month. 

“It was just the perfect day to drop, with all the concerns around,'' said the head of research of a local broking company. 

The KLCI closed down six points at 827, putting the index within the vicinity of the important 200-day moving average. 

The volume of shares traded yesterday totalled 313 million, and the value of shares changing hands at RM660.4mil. 

Analysts said global markets were once again being affected by so-called noise, or events that would cause investors to become more bearish or question whether economic growth prospects were in jeopardy. 

“Oil has been rising for one reason after another,'' an analyst noted. 

Oil prices in the United States reached a new 21-year high of nearly US$44 per barrel yesterday after America raised its security alert to high for a possible Al-Qaeda attack on a top financial institution. 

Dampening investor sentiment too was the slower-than-expected pace of US economic growth in the second quarter, which came in at 3%.  

Economists had been expecting GDP growth of 3.7% for the United States for the second quarter. 

An assortment of market dragging factors sent Malaysian stocks broadly lower, with losers outpacing gainers 3.5 to one. 

Liqua Health Corp, which posted losses for its first quarter, continued with its speculative surge, climbing 17 sen or 10.9% to RM1.73. The volume of its stock transacted on Bursa Malaysia over the past three weeks has now exceeded the company's entire share base of 270 million shares. 

While uncertainty dampened sentiment, investors nonetheless took the opportunity to reward stocks that had reported good financial results during the current earnings season. 

One such stock was Tong Herr Resources Bhd, which about doubled its earnings in the just completed second quarter ended June 2004 from the corresponding period a year ago. The stock climbed 10 sen to RM3.32. 

Shares in Malayan Banking Bhd closed down 10 sen to RM10.60, Tenaga Nasional Bhd ended unchanged at RM9.95, and Telekom Malaysia Bhd dropped 10 sen to RM10.20. 

Maxis Communications Bhd fell 30 sen to RM8.50 with 6.4 million shares changing hands. The volume of Maxis shares transacted was the highest since Feb 18. 

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 A&M :  [Stock Watch]  [NewsTONGHER :  [Stock Watch]  [NewsMAYBANK :  [Stock Watch]  [NewsMAXIS :  [Stock Watch]  [News

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