Share prices on the Bursa Malaysia tumbled Tuesday, Jan 26. The closely watched FBM KLCI opened flattish but lost ground as the day progressed. The benchmark index slid sharply into the red after the mid-day break with confidence hurt by the sell-off in key regional markets. It ended the day almost 14 points lower at 1,283.

Asian markets fared poorly as investors got increasingly nervous on the sustainability of the global economic recovery. Stock prices, having rallied so strongly since March 2009, are particularly vulnerable to uncertainties.

The string of recent developments has cast doubts on the sustainability of the strong economic rebound registered in 2Q and 3Q2009, not least the Chinese government’s moves to rein in credit in the world’s third largest economy. News reports indicate that some major Chinese banks have halted new loans for the rest of the month.

Meanwhile, the People’s Bank of China implemented a planned increase in requirement reserves for select banks, on top of last week’s overall 50 basis point rise. China has, thus far, been the strongest driving force behind the global turnaround.

South Korea’s latest 4Q2009 GDP numbers underlined concerns that the global recovery may be losing steam. The country’s economy grew a slower than expected 0.2% in the last three months of 2009, after expanding 2.6% and 3.2% in 2Q and 3Q2009, respectively. Earlier, Singapore reported that its GDP actually shrank an annualised 6.8% in 4Q2009 after rebounding 21.7% and 14.9% in the previous two quarters.

Unsurprisingly, market breadth on the local bourse was in the red. At the close, losing stocks outnumbered gaining ones by well over nine to two. Some of the big losers include Hartalega, Top Glove, MISC, Supermax, MPI, Kossan and CIMB.

Trading volume increased to about 1.25 billion shares. Talam was, by far, the most heavily traded counter for the day. Other active were IRCB, Public Packages, KNM, L&G and Time Engineering.