News – By administrator on Wednesday, February 23, 2011 – 04:04

PETALING JAYA: Asian markets experienced choppy trade yesterday as conflict in the Middle East affected investor sentiment with oil prices rising and gold surging to a seven-week high.

Crude oil climbed US$1.94 to US$88.14 per barrel at 5pm with spot gold surging US$8.80 to US$1,398.32 per ounce.

Most markets were down in early trade but regained some ground towards the end of the trading day with the benchmark FBM KLCI seeing a more than half-per cent gain to 1,525.85.

Although the index was up, the market was broadly lower with 311 gainers versus 792 losers while 267 counters were traded unchanged. There were 1.84 billion shares traded with a total turnover of RM2.06bil.

OSK Research Sdn Bhd research head Chris Eng told StarBiz that the local bourse’s gains were mainly due to the positive results that have so far been announced.

He said the local bourse managed to gain ground on news such as Malayan Banking Bhd’s (Maybank) second-quarter ended Dec 31, 2010 results, which surpassed estimates. The bank also declared a 28 sen gross dividend per share.

Eng reiterated a “buy into weakness” strategy for the local market, which would continue to see positive results announced.

Besides Maybank, other selected bluechip counters whose gains helped support the index were Genting Bhd, Tenaga Nasional Bhd, IOI Corp Bhd and CIMB Group Bhd.

For markets in the region, Tokyo’s Nikkei 225 was up 0.14%, Hong Kong’s Hang Seng Index fell half-a-per cent while Shanghai’s A share index advanced 1.12%, correcting from an earlier knee-jerk reaction to the People’s Bank of China‘s Friday announcement that the reserve requirement ratio for banks would be raised 50 basis points from this Thursday.

Meanwhile, National Australia Bank Ltd economist Ben Westmore told Bloomberg that tensions in the Middle East, including the Libyan uprising, were having an impact on oil supply.

“Its not a Saudi Arabia or an Iran, but it will have an impact on the market balance if you were to see oil supply limited because of these conflicts,” he said.

Another observer, Energy Overview editor and former futures broker Mike Fitzpatrick said “prices gyrate wildly with each new headline”.

“If more moderate and friendly-to-the-West governments like Jordan or Bahrain topple, US$100 may not be so ridiculous as it seemed only a few days ago,” he said.

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