FBM KLCI falls 2% after US stocks' 4% overnight drop

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KUALA LUMPUR (Feb 6): The FBM KLCI fell 39.16 points or 2.1% with Asian share markets today following US equities over 4% drop overnight. Global stock markets fell as investors took their cue from higher US bond yields amid US interest rate hike expectation. 

At Bursa Malaysia today, the KLCI opened at 1,813.91 points at 9am before falling to 1,816.88 points at 9:13am.

"On the local front, we think equities are likely to extend the selling activities over the near term with the heightened volatility in the global markets. Also, we may anticipate the heavyweights to take another round of selloffs, contributing towards a softer FBM KLCI around 1,830 levels. Nevertheless, traders could look into solid fundamental stocks and GLC-related (stocks) for bargain hunting activities and (Malaysia) GE14 thematic idea," Hong Leong Investment Bank Bhd wrote in a note today.

Across Asian stock markets, Japan's Nikkei 225 fell 4.85%, South Korea's Kospi dropped 2.54% while Australia's S&P/ASX 200 was 2.56% lower. 

Overnight in the US, Reuters reported that U.S. stocks plunged in highly volatile trading on Monday, with the Dow industrials falling nearly 1,600 points during the session, its biggest intraday decline in history, as investors grappled with rising bond yields and potentially firming inflation. The benchmark S&P 500 and the Dow suffered their biggest percentage drops since August 2011 as a long-awaited pullback from record highs deepened.

The Dow Jones Industrial Average fell 1,175.21 points or 4.6% to 24,345.75, the S&P 500 lost 113.19 points or 4.10% to 2,648.94 and the Nasdaq Composite dropped 273.42 points or 3.78% to 6,967.53.