KUALA LUMPUR: Asian markets took a breather on April 7, registering losses of between 0.28% and 2.47% after the recent rally as concerns about bigger-than-expected losses at US banks prompted investors to lock in gains.

European markets opened steadier but sentiment was affected by new data that showed Europe’s recession had worsened more than estimated in the fourth quarter as companies reduced production and consumers reined in spending.

The European economy fell 1.6% from the previous three months, the most in at least 13 years, according to Bloomberg.
 
In the US, the Dow Jones Industrial Average opened 1.4% lower at 7,864.74 points. The S&P 500 lost 1.2% to 825.42 points.Singapore’s Straits Times Index fell 2.47% or 45.59 points to 1,802.39, Japan’s Nikkei 225 eased 0.28% to 8,832.85, and Hong Kong’s Hang Seng Index gave up 0.46% to 14,928.97.

On Bursa Malaysia, the KL Composite Index fell 3.93 points to 919.84, but off the intra-day low of 912.95. Turnover was nearly 804 million shares valued at RM1.22 billion. The KLCI had surged 81.45 points or 9.7% from the year’s trough of 838.39 on March 12.

Malayan Banking Bhd rights shares entitlement (Maybank-OR), which started trading on April 7, skidded 36 sen to RM1.06. It was the most active with 109 million units done. Maybank fell 24 sen to RM3.92.

The renounceable rights were allotted to Maybank shareholders under its rights issue exercise on the basis of nine for every 20 shares held.

British American Tobacco (M) Bhd fell 25 sen to RM45.75, Tanjong plc lost 20 sen to RM13.90 while Tenaga Nasional Bhd and Public Bank Bhd fell 10 sen each to RM6.30 and RM7.85. Quill Capita Trust lost 26 sen to 84 sen.

Axiata Bhd fell six sen to RM2.63 but Telekom Malaysia Bhd rose four sen to RM3.64. Axiata’s shares go ex today.

Tasek Cement Bhd jumped 55 sen to RM3.30 with 1,000 shares done. Last Friday, it fell 47 sen to RM2.75, the lowest since Nov 9, 2006. Another cement stock, Lafarge Malayan Cement Bhd, added 16 sen to RM4.32.

Other gainers were Sime Darby Bhd, Genting Bhd, MISC Bhd and Bursa Malaysia Bhd. Sime rose 25 sen to RM6.15, Genting 18 sen to RM4.46 while MISC and Bursa gained 15 sen each to RM8.65 and RM5.75, respectively.

Gamuda Bhd shares gained nine sen to RM2.44, the highest since September last year, after Credit Suisse said the company was seeking government contract to upgrade the rail lines in Kuala Lumpur.
 
The research house said Gamuda was stepping up its pursuit of government projects following the government’s pump-priming exercise to avert a deeper recession.

Malaysian Resources Corp Bhd added 3.5 sen to 97.5 sen, the highest since August last year.

On the commodities front, crude palm oil futures for June delivery rose RM35 to RM2,180 while light crude oil eased US$0.90 to US$50.15.

RHB Research Institute said the KLCI, which rose past 920 to a three-month high on Monday, had to stay above that level to sustain a week-long rally.

The index faces a “strong test” at 920, which is a “significant technical hurdle as well as the support-turn-resistance uptrend line,” RHB Research said. “A failure will surely trigger a sharper dip, hence ending the current upsurge.”

However, Maybank Investment Research head Vincent Khoo said the market could still extend its rally as market sentiment was still intact.

“There are fresh funds entering the market. The market is still quite resilient barring any very negative global issues,” he said.

Jupiter Securities head of research Pong Teng Siew said the current pullback of the local stock market was in line with the regional bourses due to a lack of further economic indicators this week.

“But I am more optimistic. I think the pullback will be short lived and only last for most of the rest of this week,” he said, adding that by Friday, the market might be poised to stage a comeback.

Pong said the fundamentals of the Asian markets, including Bursa, were stronger compared with the US as most Asian financial institutions were not that badly hit by the global economic crisis.

“Take our local banks for example, the capital ratio is still quite strong and the non-performing loans are not climbing yet,” he said. “In this context, they are not exhibiting any true symptoms that will make investors worried.”

Kumpulan Sentiasa Cemerlang Sdn Bhd director Choong Khuat Hock viewed the recent market uptrend as more of a bear market rally.
 
“Unless there is a real recovery in the global economic scenario, I think the rally, if any again, may end sometime towards the end of the second quarter,” he said.