CORRECT: Malaysian shares close lower on weak Wall Street, ahead of GDP

CORRECT: Malaysian shares close lower on weak Wall Street, ahead of GDP

	Published : Wed, 29 Aug 2007 11:49 By : Agencies Print this Story

KUALA LUMPUR (Thomson Financial) - Malaysian shares closed lower Wednesday, after US stocks fell overnight amid doubts that the Federal Reserve will cut its key fed funds rate to help end the current financial turmoil.

Caution ahead of the release of Malaysia's second-quarter gross domestic product data, released after the market close, also deterred investors from taking fresh positions.

The Kuala Lumpur Composite Index closed down 15.25 points or 1.2 percent at 1,263.70, off a low of 1,247.37.

The FTSE Bursa Malaysia 30 large-cap index declined 94.12 points or 1.2 percent to 8,027.69 and the second-board index dropped 1.13 points or 1.1 percent to 103.38.

Decliners led gainers 700 to 184, with 191 stocks unchanged and 276 untraded.

Volume traded was a lean 976.8 million shares, valued at 1.8 billion ringgit.

'I consider today's fall as a normal correction following recent gains,'' said Phua Kwee Hock, technical chartist at SJ Securities.

'The market remains on an upswing mode with resistance at 1,340 points, factoring in a pre-budget rally which I believe will likely take place,'' he said.

Phua said he also views the selldown overnight on Wall Street as a normal correction, with the US markets likely to be rangebound going forward.

'The worst case scenario may be another fall of about two hundred points on Wall Street, I don't see a harder fall than that in the immediate term,'' he said.

For the KLCI, Phua said he sees support at 1,240 points.

Earlier, Aseambankers Research said the pattern over the past two trading days suggests that the appetite for small-cap stocks remains weak, while key heavyweights have recovered slightly from recent selloffs.

The research firm is advising investors 'to sell into strength' and said its preference is for oil and gas, construction and property stocks.

At the close, blue chips British-American Tobacco (BAT), Tanjong and United Plantations led the losers.

BAT shed 50 sen to 41.25 ringgit, Tanjong slumped 50 sen or 2.9 percent to 16.80 ringgit while United Plantations lost 40 sen or 3.3 percent at 11.90 ringgit.

Among index heavyweights, national power company Tenaga slumped 35 sen or 3.4 percent sen at 9.95 ringgit, while state-run Telekom Malaysia was down five sen at 9.70 ringgit.

Malaysia's largest bank Maybank was unchanged at 11.60 ringgit ahead of the release of its annual results after the market close.

Elsewhere, national car maker Proton fell 15 sen or 2.9 percent to 5.05 ringgit. Proton reported Tuesday that its net loss for its first quarter to June narrowed to 46.75 million ringgit from 58.65 milliona year before.

Government-linked conglomerate Sime Darby dropped 10 sen to 9.40 ringgit after it said its net profit for its fourth quarter to June fell 18.7 percent to 326.97 million ringgit. Sime Darby's net profit for the financial year was 1.558 billion ringgit, up 34.3 percent.

Air cargo company Transmile Group lost 10 sen or 2.8 percent at 3.52 ringgit after the company reported Tuesday that its second-quarter net loss widened to 28.02 million ringgit from 15.09 million.

Meanwhile, the ringgit was quoted at 3.5010/5050 to the US dollar, the three-month interbank rates were at 3.55/58 percent and overnight rates stood at 3.49/51.

The government said after the close that the economy grew 5.7 percent in the second quarter, above the range of economists polled by Thomson Financial for growth of 5.2-5.4 percent.

johnkb.tan@thomson.com

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