The stock market got off to a bad start for the second half of the year – after an already weak first half that saw a loss of nearly 18% for the KLCI.

Investor confidence remains on shaky ground. Investors are being troubled by persistent uncertainties, both domestically and globally. There is no evidence to suggest that prevailing trading conditions are about to change anytime soon.

Long-standing external concerns over the health of the US economy, high crude oil prices and rising inflationary pressures remain.

These problems are being compounded by domestic issues -– namely the impact of the recent 41% hike in fuel prices and the latest political developments. The confluence of these negative factors is likely to keep investors at bay in the near term.

The KLCI opened marginally higher on July 1, but soon fell sharply throughout the morning and afternoon sessions. It slumped as much as 17 points before ending 10.8 points down at 1,175.8. Declining stocks beat advancing ones by a 2.1-to-1 margin.

Trading volume was very thin volume at 340 million shares -– down from Monday's 371 million shares. This was the third lowest volume so far this year and reflects investors' cautious stance in the wake of these uncertainties.

Volume leaders include AirAsia, Bumiputra-Commerce, Resorts, Gamuda, YTL Power and Sime Darby. Gainers include Tanjong plc and Proton, but mostly on thin volume. Losers include BAT, KNM, Bumiputra-Commerce and Bursa Malaysia.

Few investors are motivated to buy under current climate. The low trading volume suggests more investors are staying on the sidelines. Wall Street's recent sharp losses are also unsetlling global investors. A number of major US economic data are due this week, including the all-important jobs data, which will influence Wall Street and global financial markets.