KUALA LUMPUR: Malaysia's rising political tension took a toll on local stocks at midday, sending the equity benchmark to its lowest in a year. The Kuala Lumpur Composite Index (KLCI) was down 19.87 points or 1.7% to 1,154.96 at 12.30pm.
Prime movers of the 100-stock index include IOI Corp Bhd and Sime Darby Bhd whose shares dipped 20 sen each to RM7.20 and RM8.95. Market breadth was negative. Bursa Malaysia saw 561 losers versus 47 gainers with a volume of 469.58 million shares worth RM225.49 milion.
Analysts said improvement in the US markets a day earlier might be able counter the negative impact of rising political tension on Malaysian stocks. The Dow Jones Industrial Average rose 32.25 points to 11,382.26, Nasdaq climbed 11.99 points to 2,304.97, while S&P 500 was up 4.91 points to 1,284.91.
"The Dow fighting back is indeed an event to take note off. Of all the political news, political defections has the most effect of the KLCI. And with more possible defections coming our way, it seems that the KLCI might possibly be dragged down lower, possibly nullifying any possible effects of the Dow.
"For now we are observing the progress of the Dow to see whether it is strong enough to counter the negatives in the KLCI," HLG Securities said in a note today.
Most Asian indices declined at midday due costlier crude oil. Among decliners, Japan's Nikkei 225 dipped 141.55 points to 13,321.65, Hong Kong's Hang Seng dropped 218.88 points to 21,883.13, while Australia's S&P/ASX 200 retreated 27.7 points to 5,111.2.
Global investors will be kept vigilant on the European Central Bank's interest rate policy tomorrow. Should the central bank maintains interest rates, it would strengthen the US dollar, hence, lower crude oil prices which will, in turn, boost the equity markets.
Crude oil for August delivery rose US$1.03 (RM3.40) to US$142 a barrel on the New York Mercantile Exchange at 11.48am.
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