FBM KLCI down led by Asian markets

Asian stocks traded mostly lower at the start of the new week. Investors, by and large, remained cautious on July 6, awaiting fresh leads for the market.
There was no direction from Wall Street, which was closed for the Independence Day holiday last Friday. The Dow Jones Industrial Average and broader-based Standard & Poor’s index had seen some profit taking, losing 1.9% and 3.5%, respectively, last week.
Investors are treading more cautiously after US consumer confidence fell unexpectedly and the US registered a higher than expected number of job losses last month. These latest data undermined optimism of an imminent recovery for the world’s largest economy.
For the rest of the month, investors will be looking closely at corporate earnings reports for 2Q09. And most importantly, management guidance for 2H09 for reasons to move share prices higher. Bad earnings were par for course in 1Q09 given that investors were extremely pessimistic then. However, expectations are much higher now. So too are the risks of disappointment.
On the home front, Malaysia’s exports in May fell a sharper than expected 29.7%, the biggest year-on-year decline so far this year. The weak numbers tempered hopes that the economy will show much of an improvement in 2Q. The domestic economy contracted by 6.2% in 1Q09.

The FBM KLCI, which replaced the KL Composite Index, opened on a weaker footing and stayed in the red throughout the trading day. The enhanced benchmark index for the local bourse ended nearly seven points lower at 1,065.8. Some of the bigger losers include MISC, Maybank, UMW and Bursa Malaysia.
Market breadth was also in negative territory all day. At the close, there were roughly 11 losing stocks for every four gaining ones. Some 763 million shares were traded Monday. KNM, Time Engineering, Time dotCom, Talam, UEM Land and Lion Corp were among the most heavily traded counters.