Malaysian shares zoom 23.1%

“Dealers said the surge was supported by the stronger ringgit but warned of profit-taking in the week ahead. It has been too much of a rise for a single day,” the institutional dealer said.

Sentiment also improved on the back of gains on Wall Street overnight and the scrapping of two-tier currency trading in Thailand, dealers said. A research manager with a local brokerage said the surge in share prices were a “jump start” after the week-long break.

“Whether it will last… is yet to be seen,” he said. While many shareshave risen by their daily permissible limit, volume is “not really that strong,” he said. ”it is just a couple of hundred of lots being traded.However, Monday’s liquidity-driven buying frenzy across the region appeared to have mostly stalled, proving that full confidence in Asia’s economic recovery remained elusive, traders said.

Although most stock markets managed to cling onto most of the gains made on Monday, the sudden halt in foreign and domestic buying underscored the region’s weak and volatile condition, they said. Instead of buying on expectations of economic recovery, panicked fund managers were reacting, some said over-reacting, to Asia’s fast, sentiment-driven swings in a bid to make sure their funds performed well.

Hong Kong, the only market with some strength, according to one fund manager, see-sawed through the day to close 53.09 points weaker at 10,525.51.

Among other weak markets, Singapore was down 1.05 per cent at 1,417.90, Jakarta was off 3.1 per cent at 536.79, and Manila was down2.79 per cent at 2,085.88. Tokyo had a strong day, rising 1.47 percent to 17,022.98 on the back of Wall Street’s 200-point rally overnight.

Stronger markets included Bangkok, up 0.75 per cent at 558.92 and South Korea, 1.20 per cent higher at 550.21. But Kuala Lumpur took center stage and traders speculated about government support.