Malaysian shares slide on US embassy scare

Malaysian shares slid as much as 1.2 percent on Monday, hit by news that suspicious white powder had been found at the US embassy in Kuala Lumpur.
Bonds strengthened on the news, although analysts said this could be short-lived if there were signs of increased security risks in the region.
The stocks recovered some of the lost ground by the close, with the main 100-stock Composite Index finishing down 0.8 percent at 809.12 points, off a two-month low of 805.95 hit in the morning, amid light trading.
Fund managers and analysts reported foreign selling, saying the embassy find added to investor jitters about earnings growth as US oil prices soared to a new record-high of $46.90 in Asia on Monday.
"It's just a bit of knee-jerk reaction, a temporary discomfort," said Choo Swee Kee, chief investment officer at KLCS Asset Management, referring to the powder find at the embassy.
Four of Malaysia's five biggest capitalised stocks fell, including top lender Maybank and phone group Telekom.
Investors turned to the safe harbour of bonds, pushing the yield on benchmark 5-year Malaysian government securities down five basis points to 4.07 percent.
Three embassy staff were briefly quarantined for detoxification after the powder was found.
The US government has feared anthrax attacks after five people died when letters with the deadly bacteria were sent to two US senators and several media groups in the United States in 2001.
The Malaysian laboratory where the powder was to be checked said test results were not expected for at least two days.
Volume on the Kuala Lumpur share market was a scant 318 million shares worth 610 million ringgit ($161 million), with decliners thumping gainers by 621 to 133.
Share trading has been light for several weeks because of concerns about high oil prices and rising interest rates in the United States - Malaysia's biggest export market.
Maybank and Telekom both fell 1.9 percent, to 10.20 ringgit and 10.30 ringgit respectively.
They accounted for nearly half of the main index's decline.
Bucking the trend was motor and financial group DRB-Hicom which initially jumped nearly six percent on persistent speculation a key stake held by the estate of its former chairman, the late Yahaya Ahmad, was up for sale to the highest bidder.
By the close, the stock had trimmed the gains to be up 0.5 percent at 1.89 ringgit.