Shares on Bursa traded sharply lower at the start of the new week, tracking Wall Street and regional losses. Sentiment was negative right from the word get-go and showed no sign of recovery as the day progressed.
The closely monitored Dow Jones Industrial Average lost almost 400 points last Friday. This triggered a selldown in most regional stock markets yesterday. Investor confidence was buffeted by the sharp hike in the US's May unemployment figure, to a three-year high, as well as the renewed surge in crude oil prices.
Crude oil futures traded on the New York Mercantile Exchange saw its brief price retreat reverse sharply late last week -– and surge to fresh all-time high of US$139 (RM451.75) per barrel. The surge sparked concerns that the widely anticipated US economic recovery in 2H08 may not materialise. Worse, there are growing fears that the recession will turn into a stagflation -– a period of high inflation with no economic growth.
On the home front, last week's 40% hike in local petrol prices are already triggering price increases across the broader economy –- putting a dent on consumer spending and raising the cost of doing business.
The KL Composite Index opened sharply lower and remained in the red all day. Market breadth was overwhelmingly negative. Indeed, the outlook for equities appears to be taking a turn for the worse.
At the close, losers outnumbered gainers by a ratio of nearly five to two. Market volume was thin at only about 408 million shares. The KLCI ended the day almost 18 points lower at 1,231.
Tenaga Nasional was the biggest loser. The stock gave back almost all of its gains from last Friday, closing 75 sen lower at RM8.25. It was also the most heavily traded stock for the day. Other actively traded stocks include Bumiputra-Commerce, Gamuda, IOI Corp and AirAsia.
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