Share prices on Bursa Malaysia succumbed to profit-taking activities on Tuesday, after the benchmark FBM KLCI hit a two-year high following two days of strong double-digit gains.

A flat overnight performance on Wall Street and elsewhere in the region also left investors with few fresh leads to fuel stock prices higher for the moment.

On Tuesday, the FBM KLCI was in negative territory throughout the day, ending 6.3 points lower at 1,317.9. Given that the key index had surged some 40 points in the preceding two days alone, some profit-taking activities were to be expected, and Tuesday’s losses were not significant in that respect.

Perhaps more important is the benchmark index’ ability to cross and stay above the psychologically important 1,300 point level. Staying above that level is crucial to sustaining domestic investor confidence for further gains, although it should be noted that the index has risen quite sharply in the last few weeks – by almost 100 points from its lows this new year.

Market breadth was negative with declining stocks beating advancing ones by a nearly 2-to-1 margin. Trading volume fell from 1.16 billion shares to 797 million shares.

Actively traded stocks include MRCB, IOI Corp, Maybank, JCY, KNM and Scomi. Major gainers include Daibochi, Hartalega, Hai-O and Tong Herr. Losers include KL Kepong and Malaysia Airports.

After alternating between optimism and pessimism almost on a daily basis, stocks had rallied recently as investors welcomed some better than expected US economic data, notably on employment and manufacturing as well as the resolution of Greece’s debt problems.

With global bourses stocks hitting six-week highs, global investors will wait for further clues on the economic recovery. The jury is still out there on the pace of the economic recovery, and investors will sift through forthcoming data.