KUALA LUMPUR (Feb 6): The FBM KLCI fell 40.62 points or 2.2% to 1,812.45 today, as the frenzied sell-off  prompted by the US stock plunge extended to a second day.

Across Bursa Malaysia, a total of 5.21 billion shares worth RM5.32 billion changed hands with declining issues sharply outnumbering advancers by 1,215 to 121, with another 198 counters closing unchanged.

The KLCI opened the day at 1,814.43, before dropping to a low of 1,795.85 in morning trade — a level not seen since the benchmark index breached the 1,800 point level at the beginning of this year.

At market close, a total of RM42.26 billion had been wiped off Bursa Malaysia-listed companies' market capitalisation.

Oil and gas-related stocks Sumatec Resources Bhd, UMW Oil & Gas Corp Bhd and Hibiscus Petroleum Bhd were the most actively traded counters, all of which ended in negative territory.

Consumer stocks were the biggest losers of the day, with Nestle (M) Bhd closing 1.97% or RM2.30 lower at RM114.30, followed by British American Tobacco (M) Bhd, down by 3.96% or RM1.32 at RM32.

Gainers, meanwhile, were mostly index-linked put warrants as investors bought in as a hedge against broader market losses.

AmBank Retail Research vice president Lim Sae Wai told theedgemarkets.com that despite the frenzied stock sell-off, the FBM KLCI is not oversold yet. However, the recovery in the benchmark index ahead of market close is too early to be considered a sign of stability.

“The glass is half full and half empty now, but it is not a major crisis. The only thing that concerns me is the volatility, as the market can be less rational than normal,” said Lim.

Lim said the massive correction in the US market is still considered healthy, despite the alarming quantum of fall in the Dow Jones Industrial Average since last Friday.

“On the local front, we have the global impact to equity since there is not much news flow. As such the external market’s influence will lead the sentiment,” he added.

Investors looking to buy in but are worried if they are catching a falling knife are advised to be selective and gradually accumulate fundamentally stable stocks that have retraced.

“It is pretty difficult to time the bottom, but the right strategy now is to be selective. It would be wise to gradually accumulate now as the rebound will come just as quickly,” said Lim.

The Cboe Volatility Index (VIX), the most widely followed barometer of expected near-term stock market volatility, more than doubled to its highest level in 2.5 years.