KUAL A LUMPUR: The FBM KLCI extended its losses on Tuesday, Oct 4 in line with the steep overnight losses at Wall Street.

At 9.10am, the FBM KLCI fell 7.40 points to 1,360.12, weighed by losses at key blue chips.

Losers beat gainers by 131 to 38, while 79 counters traded unchanged.

Among the major losers in early trade were KLK, Batu Kawan, Cahya Mata Sarawak, BAT, QSR, Maybank, Genting, Hong Leong Bank and RHB Capital.

Meanwhile, the Nikkei average dropped over 2% Tuesday to its lowest in six months as trading companies fell on weaker commodity prices and the financial sector was pressured by fears that Europe's debt crisis is spreading, according to Reuters.

ECM Libra Research head Bernard Ching in a note Oct 4 said equity markets were expected to continue to be besieged by external uncertainties and widespread risk aversion.

Although the FBM KLCI has corrected 14.3% from recent peak, it had not fully priced-in a recession yet, he said.

“We believe policy missteps are the greatest risks to tip a slowdown in global economy into a recession.

“Maintain end-2011 FBM KLCI target at 1,450 (13x/ P/E) and introduce a conservative 1,440 target for end- 2012 based on 2x P/B amid rising risk of earnings downgrade,” he said.