(AFP) - Prime Minister Mahathir Mohamad has blamed Wall Street for last week's plunge of almost 11 percent on the Malaysian stock market, saying "Mr Dow and Mr Jones are not cooperating".

The Kuala Lumpur Stock Exchange composite index tumbled another 4.2 percent at the end of morning trade today, losing 24.1 points to close at 553.34.

"The only thing we can do is to give incentives to the New York Stock Exchange because every time that one comes down, everybody comes down, not only us," Mahathir told reporters today.

"If you look around the region, everybody is performing very badly, all because Mr Dow and Mr Jones are not cooperating."

The premier was asked why the stock market had fallen significantly despite recent economic stimulus measures and a 10-year development plan announced by the government.

Dealers said selling of key blue chips continued today amid persistent speculation that the Malaysian ringgit peg may be revised amid weaker regional currencies.

Little influence

Repeated insistences by Mahathir and Finance Minister Daim Zainuddin that Malaysia would not alter or abolish its currency peg has little influence on the market, they said.

Investors, especially foreigners, were continuing to shift to bonds or to cheaper regional markets given weaker regional currencies, they added.

Some analysts have said the weakening of the Japanese yen increases the chances that the ringgit peg, fixed at 3.80 to the dollar since September 1998, will be loosened to make Malaysian exports more competitive.

But Daim yesterday said the peg would remain and urged Malaysians to instead raise productivity and efficiency to boost exports.

Manufacturing sector weaker

Pankaj Kumar, research head at OSK Research, said the latest industrial output figures reflected the current slowdown in the manufacturing sector which accounts for 33 percent of gross domestic product.

Pankaj said the downward trend began in October last year and was expected to slow further, dampening the economic outlook.

The Statistics Department said on Friday that February industrial output rose 4.3 percent year-on-year but fell 2.5 percent from January.

Opposition parliamentarian Hassan Mohamad Ali questioned today whether share prices would rally if Mahathir stepped down, as they did in the Philippines when President Joseph Estrada quit.

Finance ministry parliamentary secretary Hashim Ismail, replying to the question in the legislature, said the "individual factor cannot determine the vagaries of the stock market".