KUALA LUMPUR: Hong Kong and Japan markets fell in early trade on Monday, Jan 18 as investors turned cautious on financial stocks after JP Morgan Chase & Co. reported a loss at its retail banking and raised loss reserves for consumer loans.

However, the FBM KLCI managed to rebound off the early and the broader market was firmer, despite extended profit taking on glove makers and chip maker MPI.

At 10am, the FBM KLCI was down 3.05 points to 1,295.53, off the early low of 1,286. Turnover was 271.04 million shares valued at RM215.85 million. There were 230 gainers, 210 losers and 182 stocks unchanged.

Hong Kong's Hang Seng Index opened 1.1% down at 21,418.34 while the Nikkei 225 lost 1.83% to 10,781.03. Shanghai's Composite Index fell 0.09% to 3,221.31 and Singapore's Straits Times Index 0.03% lower 2,907.61.

Light crude oil fell 78 cents to US$77.22 and US spot gold shed five sen to US$1,130.88.

Hwang DBS Vickers Research said the U.S. market retreated by 0.9%-1.2% last Friday as investors turned cautious on financial stocks.

"Taking cue from the external development, our benchmark FBM KLCI may see a slight retracement today, widening the gap from the psychological mark of 1,300. Meanwhile, the immediate support would be at 1,280 which we think is unlikely," it said.

Nevertheless, the research house said there might be some trading interest in Affin Holdings after Bank Negara has approved its proposal to start talks to acquire a controlling stake in the Indonesian bank, PT Bank Ina Perdana. Affin rose two sen to RM2.49, but off the high of RM2.59. Affin-WC rose 1.5 sen to 20 sen.

Hwang DBS Vickers Research said construction companies could be in focus as Malaysia plans to sign more than 13 preliminary agreements with India during Prime Minister Datuk Seri Najib Razak's five-day visit to the country this week.

At Bura, Latexx fell 26 sen to RM3.92, Top Glove 20 sen to RM11.18, Hartalega and Latexx-WA 14 sen each to RM6.92 and RM3.45 while Kossan gave up 12 sen to RM6.60 and Supermax shed 11 sen to RM5.45. However, IRC added six sen to RM1.43.

MPI fell 22 sen to RM7.28 as investors locked in gains from last Friday.

Pentamaster rose eight sen to 61.5 sen with 14.4 million shares done. HaiO rose 12 sen to RM8.74, KPJ 11 sen to RM2.65 with Kulim gained seven sen to RM7.44.