However, the recovery in Asian markets in the late afternoon and positive outlook for crude palm oil (CPO) futures encouraged some nibbling on plantations and enabled the 100-stock KLCI to close off the day’s low of 1,000.34.

The KLCI closed 0.22% or 2.20 points lower at 1,012.01. Trading volume was 1.7 billion shares valued at RM1.32 billion. There was still an apparent lack of conviction from investors, as reflected in the broader market where declining counters beat advancers 512 to 151.

Among key Asian markets, Japan's Nikkei 225 fell 2.44% to 9,038.69 and South Korea's Kospi was 0.36% lower at 1,386.68. However, Singapore's Straits Times Index rose 1.55% to 2,172.92; Hong Kong's Hang Seng Index advanced 1.38% to 17,022.91 and the Shanghai Composite Index was up 0.28% to 2,652.78.

In India, trading on Mumbai's stock exchange was suspended after the surge in the Sensitive (Sensex) Index following the Congress Party's win in national elections, which was expected to result in economic reforms and market-friendly policies.

The Sensex jumped 10.7% to 13,479.39 minutes after opening and triggered a two-hour pause. On resumption, it surged to 14,272.63, resulting in the stock market shutting down for the day.

European markets opened lower across the region, tracking the earlier losses at the Asian stock exchanges.

AmResearch Sdn Bhd head of research Benny Chew said he was still bullish on the local stock market notwithstanding the short-term profit taking yesterday.

"There is still ample liquidity to support the KLCI as funds here are under-invested, and now is an excellent buying opportunity for investors," he said, adding that AmResearch had a fair value of 1,050  for the KLCI.

Inter-Pacific Research Sdn Bhd said the KLCI's initial fall was due to profit taking and investors reacting to developments in the US and other Asian economies, with no clear signal that the global financial crisis was over.

It said there was still sufficient domestic liquidity to support the market, and there were clear indications that local institutional and retail investors were participating more than foreign funds here.

At Bursa Malaysia Securities, among the major losers yesterday were Bumiputra-Commerce Holdings Bhd (BCHB), IOI Corporation Bhd, Tenaga Nasional Bhd, Malayan Banking Bhd and Public Bank Bhd.

Gainers included Genting Bhd, Axiata Group Bhd, Sime Darby Bhd, Pos Malaysia Bhd, PLUS Expressways Bhd and IJM Corporation Bhd.

BCHB fell 25 sen to RM8.75, IOI Corp eight sen to RM4.36, Tenaga 10 sen to RM7.30, Maybank four sen to RM4.96 and Public Bank five sen to RM8.45.

Genting and IJM added 10 sen each to RM4.82 and RM5.30, respectively; Axiata four sen to RM2.21, Sime five sen to RM6.65, Pos 25 sen to RM2.50 and PLUS two sen to RM3.20.

On crude palm oil (CPO) futures, Inter-Pacific Research said CPO prices could breach the RM3,000 per tonne mark in the short term given than inventories were low and demand had been picking up.

It said production was down by 4% year-on-year in 1Q09 due to weather and tree stress, while inventory in January 2009 was 1.8 million tonnes and 1.3 million tonnes in March.

"Adding on, inventory/exports eased to 1.08 times in March from 1.35 times in January. With raw material prices up, we expect the operating cost to increase. The price of other commodities like soya has also been high, so this could also increase demand for CPO and push prices up," it said.

Earlier yesterday, CPO futures received a boost when Indian conglomerate Godrej International's head of vegetable oil purchasing Dorab Mistry said the commodity could soon surpass the psychological RM3,000 per tonne level.

CPO reversed some of its earlier losses and closed RM35 lower to RM2,630 per tonne for July delivery and RM65 lower to RM2,666 for June delivery. Light, sweet crude oil rose 62 cents per barrel in electronic trading to US$56.96 as at 6.20pm yesterday.