Malaysia Hot Stocks-Market seen jittery after China clampdown
KUALA LUMPUR, May 30 (Reuters) - Malaysian shares are likely to fall for a second straight day on Wednesday, after China's move to cool its overheating stock market added to fears of a technical correction in Asian markets, dealers said.
"The market is jittery, very jittery," said a dealing head with a bank-backed brokerage. "It's scared of China. The U.S. rose overnight but the undertone, with China raising taxes on stock trades, could lead markets downwards."
China's authorities raised stamp duties on share trades, a move seen as a bid to clamp down on the overheated market. China's Ministry of Finance made the midnight announcement through the official Xinhua news agency, an unusual move that underlined deep government concerns about its stock market.
In the 16-year history of the modern Chinese stock market, an increase in stamp duty has always caused a market slump over the following few weeks or ended a bull run.
On Tuesday, Malaysia's benchmark Composite Index fell 0.2 percent to 1,343 points led by declines in third-largest lender Public Bank Bhd and Maxis Communications , Malaysia's largest mobile phone firm.
The May futures contract put the key stock index at 1,338 points and June futures put it at 1,329 points.
"Flows are light, with a net sell (bias), said a dealer with a foreign brokerage. "We expect the market to remain rangebound on a lack of fresh leads." He noted that Asian exchange-traded funds were mostly higher overnight, with Malaysia up 0.8 percent.
Malaysian cement-maker Cement Industries of Malaysia Bhd could be in focus after its 51 percent-owner, state-controlled developer UEM World Bhd , said sale talks with France's Vicat were still ongoing.
U.S. stocks ended higher on Tuesday, helped by a wave of takeover news, but China's move to cool off its skyrocketing stock market limited Wall Street's broader advance and raised concerns about a global equity sell-off.
The Dow Jones industrial average edged up 0.10 percent to 13,521.34. The Standard & Poor's 500 Index rose 0.16 percent to 1,518.11 and the Nasdaq Composite Index 0.58 percent to 2,572.06.
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