Shares on the Bursa Malaysia opened sharply lower at the beginning of the new week. The KL Composite Index fell as much as 14 points in the early hours of trading while the number of losing stocks overwhelmed gaining ones. But sentiment gradually improved as the day progressed. The benchmark index pared losses and eventually closed just marginally lower at 1,012 points. Market breadth, on the other hand, remained well in the red. At the close, losing stocks outnumbered gaining ones by a ratio of roughly seven to two.
Trading volume too declined Monday. Just about 1.7 billion shares worth RM1.3 billion changed hands. Market volume has slowed in the past few trading days after hitting record high of 3.85 billion shares last Monday. KNM was the most heavily traded counter for the day. Other actives include TA-WB, SAAG, Scomi, Talam, Compugates and Mulpha. A similar trading pattern was observed in key Asian markets where the overall sentiment was one of caution. Wall Street ended broadly lower last Friday on the back of weaker than expected retail, housing and unemployment reports.
Investors had chased equity prices sharply higher over the past two months when data indicated that the worst of the recession might be behind us. To extend the rally, they will require some concrete evidence of a recovery, including stronger corporate earnings. However, many companies remain cautious.Global giants such as Toyota, Sony and Panasonic have recently warned of more losses in the current financial year with the outlook for consumer spending staying weak. The eurozone economy contracted 2.5% in 1Q09, worse than the decline in the US, whose housing market slump was the starting point for the current global recession.
Concerns over the timeframe of a recovery also weighed on crude oil prices. Crude oil futures gave back some recent gains, trading slightly lower at around US$57 (RM202.92) per barrel.
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