European markets also started off on a negative note yesterday with the London FTSE 100 and the DAX Index shedding about 1.5% in early trade, dragged down by worries that an economic recovery might be some way off.

In Asia, Japan’s Nikkei 225 fell 1.38% to 9,680.87 points; Hong Kong’s Hang Seng Index lost 1.23% to 17,979.41, the Singapore Straits Times Index was down 1.46% to 2,266.09 and the Taiwan Taiex Index lost 0.23% to 6,649.91.

The Shanghai Composite Index added 1.18% to 3,124.67 and the South Korean Kospi gained 0.63% to 1,428.94.

The FBM KLCI fell 0.64%, or 6.86 points, to 1,065.83 at the close, weighed down by losses at many of the 30 component stocks, notably Malayan Banking Bhd, IOI Corporation Bhd, Genting Malaysia Bhd, Sime Darby Bhd and MISC Bhd.

Turnover was relatively thin at 762.71 million shares valued at RM844.12 million. Gainers led losers by 436 to 157, while 174 counters traded unchanged.

Crude palm oil futures fell RM46 per tonne to RM2,129 for September delivery and RM34 per tonne to RM2,136 for October delivery. Crude oil fell US$2.72 per barrel to US$64 as at 6.30pm yesterday.

MIDF Research head Zulkifli Hamzah said the performance of the local stock exchange yesterday had little to do with the switch to the FBM KLCI, but more because of the sentiment in regional markets.

He said the FBM KLCI had been designed to cause very little disruption to the market and fund managers were also well prepared to meet the changes.

“Having said that, Asian markets are still faring better than their Western counterparts,” said Zulkifli.

“Asia has more story in terms of sustained demand, so more smart money is shifting towards Asia now compared to the US and Europe.”

Of the 30 stocks on the FBM KLCI, only five advanced yesterday, 17 fell and eight traded unchanged.

Among the major losers, Maybank and Genting Malaysia fell 10 sen each to RM5.65 and RM2.68, MISC lost 15 sen to RM8.55, IOI Corp shed eight sen to RM4.66 and Sime eased five sen to RM7.20.

Public Bank Bhd and Tenaga Nasional Bhd fell five sen each to RM9.10 and RM7.70; YTL Corporation Bhd and UMW Holdings Bhd lost 10 sen each to RM6.75 and RM6, while Malaysian Airline System Bhd fell four sen to RM2.95.

Other losers included Toyo Ink Group Bhd, KFC Holdings (M) Bhd, Fraser & Neave Holdings Bhd, Kumpulan Perangsang Selangor Bhd and Dutch Lady Milk Industries Bhd.

IJM Corporation Bhd was the top gainer, rising 30 sen to RM5.60, Yikon Corporation Bhd added 29.5 sen to 84.5 sen, Ipmuda Bhd was up 28 sen to RM1.03 and Hong Leong Bank Bhd gained 25 sen RM5.65.

Other gainers included Shell Refining Company (Federation of Malaya) Bhd, Ewein Bhd, Top Glove Corporation Bhd, Hap Seng Consolidated Bhd and Hartalega Holdings Bhd.

KNM Group Bhd was the most actively traded stock with 46.52 million shares done. The counter fell four sen to 75 sen.

Other actively traded stocks included Time Engineering Bhd, Talam Corporation Bhd, UEM Land Holdings Bhd, Lion Diversified Holdings Bhd, Lion Corporation Bhd and Tebrau Teguh Bhd.

This article appeared in The Edge Financial Daily, July 7, 2009.