Bears Hug FBM KLCI; PPB Selldown

FBM KLCI Tanked 1.65% Taking Out Critical Supports

All FBM 30 Components Stocks Kena Bearhugged

Share prices drifted lower right from the opening bell with selling pressure intensifying as the day progressed. Negative sentiments further pressure Asian bourses amid weak global markets as Europe’s debt crisis continued to cast a shadow over the global economic recovery.

Of the heavyweights, CIMB Group was down 17 sen to RM7.04, IOI Corp lost 26 sen to RM5.00, Sime Darby fell eight sen to RM8.18 and British American Tobacco declined 82 sen to RM42.98.

The benchmark FBM KLCI closed 21.94 points lower at 1,308.2.

At the close, losing stocks outpaced gaining ones by a five-to-one margin. Trading volume increased to 781.53 mil shares worth RM1403.32 mil as compared to Tuesday's 690.92 mil shares worth RM1144.04 mil.

The weak sentiment on the local bourse was also triggered by sharp 5.8 per cent fall in the shares PPB Group.The local plantation and property group fell today after its affiliate, Wilmar International Ltd, was downgraded by Credit Suisse Group AG. It fell RM1.02 to close at RM16.60.

Some of the most heavily traded counters were Talam, Berjaya Corp, Affin-WC, AIM and Maybank. We expect investors to stay cautious and take cues from the global financial market.

The sharp slide in PPB shares is likely to have further dampened sentiment on the local bourse. Its Singapore-based 18.4% associate company, Wilmar International is reportedly looking into media claims that its Indonesian unit colluded with tax officials to obtain fraudulent tax refunds. The drop in Wilmar’s share price was also a drag on the Singapore market.

The Finance Index lost 1.7% to 11828.09 points, the Properties Index tumbled 2.0% to 773.06 points and the Plantation Index slipped 2.7% to 6168.44 points. The market traded within a range of 22.39 points between an intra-day high of 1329.05 and a low of 1306.66 during the session. The FBM Emas Index dropped 156.79 points to 8,791.11, FBM70 dipped 171.40 points to 8,613.67 and the FBM Ace Index went down 52.45 points to 3,932.74.

The main market volume rose to 647.275 million shares worth RM1.372 billion from 600.555 million shares worth RM1.126 billion on Tuesday.The ACE market volume increased to 72.558 million units valued at RM10.565 million from 52.628 million units valued at RM6.647 million on Tuesday.