THE already lethargic stock market will likely come under more selling pressure in the coming days following a new twist in the domestic political arena.

Analysts expect foreign funds, especially, to continue selling out in the next few days following yesterday’s decision by a component party in the ruling Barisan Nasional to either table or support a vote of no confidence on Prime Minister Datuk Seri Abdullah Ahmad Badawi’s leadership in parliament next week.

Sabah Progressive Party (SAPP) chief Datuk Yong Teck Lee held a press conference in Kota Kinabalu, Sabah, yesterday to explain the party’s decision.
The news jolted the market, dragging down the Kuala Lumpur Composite Index (KLCI) to close at its lowest level since March 24. It shed 15.17 points or 1.24 per cent to close at 1212.59, off an intra-day low of 1208.94.

"While it is unclear what SAPP’s intentions are, it is clear that there will be more political uncertainties ahead," HLG Retail Research said in a note yesterday.

The KLCI’s next support level is seen at 1200 points, but this is fragile, and there is a significant downside gap to support levels of 1160-1170 seen in March, it noted.

SAPP did not say whether it would quit the BN to join a rival but it is expected to make its stand clear on June 23.