Malaysian shares were mostly lower on Tuesday, but last-minute buying of leading stocks pushed the key index into positive territory after being down for most of the day.
Market sentiment was earlier unnerved by news reports that an explosion had occurred outside the Australian High Commission building in the Malaysian capital.
Officials said a small explosive device was hurled from a passing car early on Tuesday, but caused no injuries or damage.
It was the first such incident involving a foreign embassy in mainly Muslim Malaysia and comes a week after Prime Minister Abdullah Ahmad Badawi scored a landslide win against the Islamist opposition in general elections.
"There is no panic situation or anything like that. Most still believe it's some sort of prank and more than anything else, it was just an excuse to continue selling," said the head of sales at a large brokerage.
The benchmark Composite Index ended up 0.22 percent at 901.52 points after trading as low as 888.19. Volume was a moderate 506 million shares, with decliners leading gainers by 693 to 158. Banking stocks led the fall in the broader market, with Commerce Asset-Holding, RHB Capital and Southern Bank down between 0.8 and 1.2 percent.
Analysts blamed the losses to concerns that banks' profit margins may be squeezed when the central bank introduces a new framework for setting key interest rates in the next few months.
But top lender Maybank bucked the trend, rising 1.8 percent to 11.60 ringgit on late support. The market's largest stock accounted for three-quarter of the main index's gain.
Malaysia Mining Corp gained 0.4 percent to 2.30 ringgit after saying it sold a 1.4 percent stake in conglomerate Sime Darby for 177.6 million ringgit in cash.
Sime shares were down 0.8 percent at 6.10 ringgit.
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