KLCI down on weak US markets

KUALA LUMPUR: Stocks fell in early trade Wednesday, dragged by losses in banking stocks as investors’ sentiment was affected by the weaker overnight close on Wall Street and also local political issues.

Investors were waiting for the Sabah Progressive Party to make a scheduled announcement at 2pm. Prime Minister Datuk Seri Abdullah Ahmad Badawi was quoted saying he was unaware of any move by
Sabah MPs to form an independent bloc. At 10am, the KLCI was down 7.93 points to 1,219.83. Turnover was 51.63 million shares valued at RM117.16mil. There were 63 gainers, 211 losers while 146 counters were unchanged.

In New York, the Dow Jones industrial average closed down 108.78 points, or 0.89%, at 12,160.30 after Goldman Sachs warned the global credit crisis will not peak until 2009.

It lowered its price targets for 14 banking companies. It also cut 2008 earnings-per-share forecasts for 11 banks, according to a Reuters report.

Goldman Sachs also warned that US banks would have to raise as much as US$65bil (RM210.4bil) in capital to shore up balance sheets weakened by the mortgage crisis. Raising capital could dilute the equity stakes of current shareholders, and shares of US banks sold off across the board, according to Reuters.

In Asia, Hong Kong’s Hang Seng Index opened 0.24% higher at 23,114.45, Japan’s Nikkei 225 rose 0.41% to 14,406.82, Singapore’s Straits Times Index fell 0.14% to 3,024.13 while Shanghai’s A Share Index gave up 1.34% to 2,892.51.

Light crude oil was at trading at US$133.38 (RM431.75) per barrel. The ringgit was quoted at RM3.237 to the US dollar.

Banking stocks were among the major losers, led by BCHB which fell 25 sen to RM8.55, Public Bank and Hong Leong Bank lost 10 sen each to RM10.80 and RM5.90. Public Bank foreign eased 10 sen to RM10,80 while Hong Leong Finance shed eight sen to RM4.86.

Other decliners were KL Kepong and Tanjong, down 20 sen each to RM17.30 and RM15.20 in thin trade.

YTL Power-WB which were listed Wednesday, fell six sen to 78 sen. They were the most active with 6.14 million units done.

Kulim and Kulim-WB rose 10 sen each to RM9.95 and RM7.30 respectively while PPB and PIE added 10 sen each to RM11 and RM5.