Malaysian share prices plunged 2.81 percent on Tuesday - the biggest one-day fall in two years - following falls in regional markets, dealers said. They said losses were across the board on forced selling by local investors after last week's record trading volume and as foreign buyers unloaded stocks.
Dealers said the declines could be attributed to renewed fears of a slowdown in the US economy, higher oil prices and mounting tension in the Middle East after Iran defied a UN deadline concerning its nuclear programme.
Speaking to a business conference in Hong Kong, former Federal Reserve chairman Alan Greenspan said the US economy has been expanding since 2001 and there are signs the current economic cycle is coming to an end.
The Kuala Lumpur Composite Index fell 35.79 points to 1,237.08, off a low of 1,220.19, with losers overwhelming gainers 1,123 to 42 and 60 stocks unchanged. Trading volume was 3.69 billion shares, valued at 4.29 billion ringgit (1.22 billion dollars).
At the close, the ringgit was quoted at 3.4955/5005 to the dollar. SJ Securities head of research Cheah King Yoong said the weak sentiment across the region could be triggered by concerns over economic data out of US as well as geopolitical tension in the Middle East. Meanwhile, HLG Securities technical analyst Khoo Ban Yu said the decline was mainly triggered by heavy deliveries after Thursday's record trading volume.
Among index heavyweights, Telekom Malaysia lost 0.30 ringgit or 2.80 percent to 10.40, Tenaga fell 0.10 ringgit to 12.20 and Maybank was down 0.10 ringgit at 13.00. Bursa Malaysia posted the sharpest fall among blue chips, losing 1.10 ringgit or 9.24 percent to 10.80 while gaming group Genting fell 0.75 ringgit or 1.90 percent to 38.75 ahead of its 2006 results due out Wednesday.
National carrier Malaysia Airlines was down 0.15 ringgit or 2.52 percent at 5.80 after rising to 6.20 in early trade. The national carrier reported a narrower net loss of 136.4 million ringgit for 2006 against a loss of 1.14 billion in 2005.