Malaysian stocks ended at their lowest level in more than two months on Thursday as violence in neighbouring southern Thailand and fears of a slowdown in China's economy spooked investors.
The local market's fall was in line with regional peers after more than 100 people were killed on Wednesday in dawn clashes when gangs of gun and machete-wielding youths attacked security forces in Pattani.
Prime Minister Abdullah Ahmad Badawi has expressed concerns the bloody clashes could spill across the border and said fleeing Thai nationals or those responsible for Wednesday's attacks could pose problems.
The key Kuala Lumpur Composite Index finished down 1.38 percent at 849.72, its fourth straight day of losses, and also its lowest close since February 17.
Overall market volume was a light 359 million shares as losing stocks beat gainers four to one.
"The underlying sentiment is still very weak," said Mohd Hasnul Ismar Mohd Ismail, who helps manage close to one billion ringgit ($263 million) at TA Unit Trust Management.
News that China would take steps to cool its economy, the sixth-largest in the world, also added to bearish sentiments while improved earnings reports failed to stir interest. Southern Bank, the country's ninth-biggest lender, fell 2.5 percent to 3.08 ringgit, despite announcing a 14 percent rise in first-quarter earnings.
Shares of Malaysia's second-biggest power producer Malakoff edged up 0.9 percent to 5.80 ringgit after its second-quarter profit for the period ended February 29, rose nine percent to 129.33 million ringgit. Among Kuala Lumpur's heavyweights, nine of the 10 largest stocks fell, led by top lender Maybank, which lost 2.8 percent to 10.40 ringgit.
Maybank's loss accounted for almost one-fifth of the key index's fall.
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