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KL shares end 2 pct down, financials slow fall

KUALA LUMPUR: Malaysian shares recouped some losses but still closed broadly down on Wednesday, with the key index losing two percent after Wall Street's fall on Tuesday.

The benchmark Kuala Lumpur Composite Index .down 2.04 percent or 17 points at 815.80. It hit an intra-day low of 808.40, just above a key 800 support.

Light buying in financial shares helped cushion the slide in the overall market. Analysts said overall, the Malaysian market fared better than most in the region which saw shares tumbling after the US tech-heavy Nasdaq index .suffered its biggest one-day point drop ever on fears of US rate hikes.

Hong Kong and Seoul shares fell by around seven percent.

"Malaysia hasn't gone up as much as the other markets in the region, so it's not falling as badly as the others," the head of research at a local brokerage said.

"That's why Malaysia is resilient," he said.

Technology stocks were among the day's big losers as investors took their profits from the sector's recent spectacular rally.

Lityan Holdings, Globetronics Technology, Fujitsu System, and Mesiniaga all lost between 30 cents and one ringgit.

Bank stocks managed to resist the sell-off.

The Kuala Lumpur Financial Index of financial stocks .ended down 1.23 percent or 82.36 points at 6,632.31 points.

Dealers said the financial index was aided by speculative play on shares of banking firms ahead of the central bank's January 21 deadline for all financial institutions to submit merger plans.

"People are speculating on several banking groups becoming anchor banks, so these are doing better than the rest of the market," a local dealer said.

Amanah Capital rose 19 cents to 1.59 ringgit a day after it announced it plans to sell its merchant bank to Malaysian Plantations Bhd.

Malaysian Plantations, which controls Multi-Purpose Bank, rose five cents while Hong Leong Bank, also seen as a potential candidate for anchor bank status, rose 15 cents.

The Malaysian market is closed on Friday, January 7 and Monday, January 10 for the Eid al-Fitr holiday marking the end of the Moslem fasting month. It reopens on Tuesday, January 11.-Reuters