Two-digit losses for KLCI again

PETALING JAYA: The Kuala Lumpur Composite Index (KLCI) posted double-digit losses for the second straight day as the Middle East crisis entered its sixth day and crude oil price continued to hover at last week's record high.  

“The weak market sentiment was largely attributed to external factors,'' a fund manager at a local asset management firm said, citing the conflict between Israel and Hezbollah fighters in Lebanon and higher global crude oil prices as key concerns. 

At the close, the KLCI was down 10.93 points, or 1.2% to 902.7, off the day's low of 899.23. Yesterday's sharp decline came on top of last Friday's 1.4% drop. 

Top losers included counters with strong institutional following like gaming group Genting Bhd which was down 90 sen, or 3.8%, to RM23 and Shell Refining Co (FoM) Bhd, which was 50 sen lower, or 4.7%, to RM10. 

A number of retail favoured stocks like Iris Corp Bhd, OilCorp Bhd and Satang Jaya Holdings Bhd staged a slight rebound after sharp falls last Friday. 

“We expect the offloading of lower liners to continue whilst the key heavyweights will continue to move in a bearish direction,'' Mayban Securities said yesterday. 

The firm suggested that investors could take advantage of the high crude oil prices by buying into plantation counters and stocks in the oil and gas sector. 

Meanwhile, investors appeared to have discounted news that the Prime Minister was likely to announce today certain projects under the Ninth Malaysia Plan. 

Construction firms like Khazanah Nasional Bhd-owned UEM Builders Bhd rose 5 sen to RM1.19 yesterday.  

The Government is also expected to release today the consumer price index (CPI) figures for June, which would probably show inflation creeping up again after a dip in May. 

According to polls by newswires, economists expect the CPI in June to grow by between 4.2% and 4.3% against the 3.9% rise in May.  

Economists also expected Bank Negara to raise interest by another 25 to 50 basis points by the year-end to keep inflation in check. 

Elsewhere in the region, stocks came under another round of sell-off yesterday, with sharp declines seen in India, Taiwan and Singapore.  

Markets in Japan and South Korea were closed for holidays. 

Gold, traditionally viewed as a safe haven at times of crisis, rose to a two-month high yesterday.  

Gold for immediate delivery rose as much as 1.7% yesterday to a high of US$677 an ounce as crude oil futures in London spiked to above US$78 per barrel in early trade.

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