KUALA LUMPUR (June 12): The FBM KLCI could not sustain its momentum and retreated in early trade on Tuesday in tandem with the reversal of gains at key regional and global markets, as the initial euphoria over the European bailout for Spanish banks died out and the reality of the long-term euro zone debt crisis resurfaced.
The FBM KLCI fell 4.16 points to 1,574.25 at 9.02am.
Losers outpaced gainers by 73 to 27, while 77 counters traded unchanged. Volume was 19.10 million shares valued at RM8.57 million.
Asian markets reversed the previous day's hefty gains on Tuesday as a European bailout for Spain's debt-stricken banks failed to convince investors that the spread of the debt crisis in Europe will be halted, according to Reuters.
Markets worried the weekend deal could further aggravate Spain's rising public debts, while attention is turning to problems in Italy and the June 17 election in Greece that could determine its fate within the common currency bloc, it said.
M&A Securities Research in a note Tuesday said the relief after euro zone finance ministers agreed to lend Spain up to $125 billion may be short lived though, as investors look forward to a Greek national election on June 17 that could put Athens on a path out of the bloc and precipitate a deeper crisis over the future of the euro.
Foreign investors have started taking profit on the FBM KLCI since early June and this iwas a bellwether ahead of the GE13.
"We continue to recommend investors to sell into strength and buy into weakness as believe the GE13 may be called after Felda Global’s listing on 28th June 2012," it said.
On Bursa Malaysia, the early losers included KLK, Public Bank, Dutch Lady, Carlsberg, CIMB, Telekom, Boustead, Ambank and Petronas Chemicals.