Malaysian and Asian stocks plunge (second update)


Kuala Lumpur: The Benchmark Kuala Lumpur Composite Index (KLCI) fell 25.69 points or 1.96% to close at 1287.7 on Friday. 

There were 899 decliners compared to 115 advancers and 166 counters were unchanged. 

In the morning the KLCI) eased 22.34 points at 1,291.05 on fresh selling pressure after Wall Street reversed down sharply in overnight trading. 

At 11.25am (0325gmt) the KLCI stood at 1287.13 down 26.26 points or 2.00%.  

There were 922 losers, 36 gainers and 90 counters unchanged. 

At 1205pm (0405gmt) the KLCI improved slightly to 1290.85.  

At 3.05pm (7.05gmt) The KLCI stood at 1283.43 

(For more KLCI info click here

Meanwhile the AP reported European Central Bank injected another euro61 billion into the banking system Friday, keeping up its efforts to soothe jittery markets amid signs that problems that began with U.S. subprime mortgages were digging deeper into the world economy. 

But stock markets did not seem appeased, with major indexes plunging in London, Paris and Tokyo. 

The latest move by the ECB, which had provided euro95 billion (US$130.7 billion) in funds to banks on Thursday, came after Japan's central bank injected 1 trillion yen (US$8.4 billion; euro6.12 billion) into money markets and the U.S. added US$24 billion (euro17.48 billion) on Thursday. 

It was the first time the U.S., European and Japanese central banks had taken such action together since the aftermath of the Sept. 11 terrorist attacks.  

The Australian and Canadian central banks also joined in. 

The U.S. Federal Reserve also added a larger-than-normal US$24 billion (euro17.5 billion) in temporary reserves to the U.S. banking system. 

In Tokyo the broader Topix index, which includes all shares on the exchange's first section, fell 2.96 percent, or 49.88 points, to 1,633.93 points. 

The plunge came after the Dow Jones industrial average fell almost 3 percent in New York Thursday. A French bank's had announced earlier it was freezing funds invested in U.S. subprime mortgages and deepened fears of a credit shortage. 

Traders said jitters over the U.S. housing and credit crunch will remain for some time to come. 

"Fundamentals in Japan and the U.S. are both rather good, but it is still unpredictable when the cloud over the U.S. subprime mortgages will clear off,'' said Takumi Osawa of Marusan Securities Ltd. 

Top government spokesman Yasuhisa Shiozaki said he did not expect the recent market turmoil to have a serious effect on Japan's economic recovery. 

Taiwan shares plummeted Friday, weighted down by the overnight meltdown on Wall Street and weaknesses on other Asian bourses. 

The Weighted Price Index of the Taiwan Stock Exchange fell 251.29 points, or 2.7 percent, to close at 8,931.31 points on moderate volume. 

Stanley Chou of Mega International Investment predicted continuing losses next Monday, but said that shares would be supported at the 8,900 mark as government funds poured into the market. 

South Korean shares plunged Friday. 

The Korea Composite Stock Price Index fell 80.19 points, or 4.2 percent, to close at 1,828.49 after falling as much as 5 percent.  

The Kopsi's point decline Friday is the third worst ever. Its percentage decline is the worst so far this year. 

Moves in international markets affect the Kospi, said Kang Moon-sung, a strategist at Korea Investment and Securities Co. 

"So no one is confident this level is (the) bottom,'' Kang said. 

Philippine shares plunged Friday with jittery investors cashing in gains. 

The 30-company Philippine Stock Exchange Index fell 103.24 points, or 3 percent, to 3281.96 - its third sharpest single-day drop this year.  

On Thursday, the market rose 0.3 percent. 

"We didn't fall as low as I've expected given the overnight losses in New York,'' said Eagle Equities President Joey Roxas.  

"What's affecting us is mostly external...it's the way the (U.S.) subprime mortgage is affecting sentiment.'' 

Hong Kong's, Singapore, Wellington and other bourses also closed lower. 

On Thursday European stocks fell sharply after French bank BNP Paribas rattled the banking sector by freezing three hedge funds amid ongoing worried about the subprime market. 

In Frankfurt, the DAX-30 Index fell 2 percent to close at 7,453.59 while in Paris, the CAC-40 slipped 2.1 percent to 5,626.97.  

London's FTSE-100 dropped 1.7 percent to 6,284.20. 

"We are not quite at the panic stage yet but this is beyond jitters,'' said Martin Slaney, Head of Spread Betting at GFT Global Markets.  

"The ripples from the initial subprime stone are expanding, the question is how far will the ramifications go?'' 

BNP, France's biggest bank, sparked the market selldown Thursday after it said it froze three asset-backed securities funds, saying it was no longer possible to "fairly'' value its holdings. Its shares fell 3.4 percent. 

That came after Germany's Commerzbank said earlier it would book around euro80 million (US$110 million) in provisions to cover expected losses from euro1.2 billion (US$1.7 billion) in subprime exposure. Commerzbank fell 4.3 percent. 

"We're going to see more of this over the next few weeks which is clearly going to hold markets back,'' said analyst Jeremy Batstone at Charles Stanley Stockbrokers in London.  

"Equity valuations are, in the round, attractive but clearly investors are very wary of the financial sectors while the toxic waste witch-hunt continues.'' 

Other banks fell as well, with Germany's Deutsche Bank sliding 3.9 percent and France's Societe Generale lost 4.2 percent. Royal Bank of Scotland slipped more than 2.4 percent. 

Not all traders and analysts agreed with the wider moves. 

"Certain banks, funds that have taken exposure to risky assets deserve to see their share price placed under pressure, however, to trample over all of the financial sector is a rush for the exit door that is unnecessary and simply ridiculous,'' said Stephen Pope at Cantor Fitzgerald Europe. 

For latest Bursa Malaysia indices, charts and other information click here

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