Not quite 1,300 yet

I was going to wait until this Thursday before I start thinking out loud whether the Kuala Lumpur Composite Index could push beyond 1300 points in March but apparently, it will seem very difficult.

Today, it looked like investors in the Far East have taken fright. After impressive gains since the beginning of the year, the regional markets retreated sharply today.

Here in Malaysia, the Kuala Lumpur Composite Index fell 35.79 points to a low of 1237.08 at the end of the day’s trade. It’s the biggest drop in more than five years. At one stage in the afternoon, the drop had registered more than 50 points but the index recovered slightly before the close.

(My friends here in Penang would have termed this plunge a lau sai but if you don’t know Hokkien, it’s best that you don’t ask me to translate this.)

One of the triggers was the Shanghai & Shenzhen 300 index which plunged almost 9% on concerns that the Chinese government would soon be taking more action to dampen its heating economy.

As I write this, I hear that the Footsie in London (the FTSE 100) is heading for its sharpest points fall in eight months. (UPDATE: The Footsie ended the day lower by 2.3%.)

Of course, the markets in the West are taking their cues from the Far East but compounding the bad news from Shanghai are warnings from Alan Greenspan, the retired US Federal Reserve chairman, that the United States may slip into a recession by the end of the year. Who says that old man has lost his influence?

Politically too, the market jitters must be due to the uncertainties over Iran. The Iranian leaders are stubbornly clinging to their insistence that they have a right to continue with their nuclear power development and Big Brother is now beating its war drums.

(ANOTHER UPDATE: The Dow eroded by 3.3%, Nasdaq by 3.9% and the S&P500 by 3.5%)

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One Response to Not quite 1,300 yet

  1. says:

    The drums of war is a legacy of the Bush Administration. What goes up must come down. For players, they must be able to withstand the onslaught of ever small global economy. Lau Sai is the right word but lets hope it won’t kill at the end.

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