Asian markets back in the red as Eurozone crisis saps confidence

The FBM KLCI fell into negative territory on Tuesday, Oct 18 as investors worried about external factors sold down to move away from risky assets as concerns over the global economic health reared its ugly head again.

Asian stocks fell on Tuesday after Germany's finance minister cautioned against hopes for a quick fix to Europe's debt problem, reminding investors not to become too optimistic about a rapid development to the two-year-old crisis, according to Reuters.

On Bursa Malaysia, the FBM KLCI fell 18.23 points to 1,447.12.

Market breadth was negative with losers beating gainers by 418 to 78, while 124 counters traded unchanged.

At the regional markets, Hong Kong’s Hang Seng Index fell 2.73% to 18,358.72, Japan’s Nikkei 225 lost 1.43% to 8,752.58, Taiwan’s Taiex was down 1.39% to 7,357.40, Singapore’s Straits Times Index fell 1.36% to 2,741.11, South Korea’s Kospi lost 1.35% to 1,839.98 and the Shanghai Composite Index shed 0.63% to 2,424.95.

BIMB Securities Research in note Oct 18 said European markets were down yesterday as the German finance minister warned that hopes for a solution to the euro zone debt crisis at a forthcoming summit were not realistic.

The Dow Jones closed lower as investors grew nervous following the news in Europe. Back to Asia, China’s 3Q GDP grew by 9.3% while inflation dipped to 6.1%, it said.

China’s latest inflation figures confirm that Beijing’s efforts to ease rising prices are bearing fruit, and reinforce predictions from market watchers that the central bank’s tightening cycle is over, said the research house.

“At home, we expect the market to remain volatile at least for a short period given negative news in the Europe and US.

“We shall see the KLCI’s immediate support level at 1,460 points and next level at 1,450 points, while on the bright side; resistance will be seen at 1,480 points,” it said.

Meanwhile, Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients Oct 18 said due to the US markets’ weaker tone last night, the local index could see a volatile tone.

“Some minor profit-taking activities could the local market slightly softer today,” he said.

Among the losers at mid-morning, Hong Leong Bank fell 36 sen to RM10.50, KLK 30 sen to RM20.68, MISC 24 sen to RM6.34, Tenaga 20 sen to RM5/37, Ta Ann and RHB Capital 18 sen each to RM4.70 and RM7.22, Genting 15 sen to RM9.97, MMHE 14 sen to RM6.01 and Petronas Chemicals 12 sen to RM6.02.

HWGB was the most actively traded counter with 25.6 million shares done. The stock shed half a sen to 37.5 sen.

Other actives included Leader Universal, Harvest Court, OSK, Tanco, SAAG and GPRO.

Meanwhile, gainers included PacificMas, AIC, Petronas Dagangan, and Genting Plantation's. (theedgemalaysia.com)