FBM KLCI pares gains as Malaysian shares seen overbought

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KUALA LUMPUR (Aug 10): The FBM KLCI pared gains for a 0.8 point or 0.04% rise as Malaysian shares' overbought technical indicators prompted investors to take profit. At 5pm, the KLCI closed at 1,805.75 points after climbing to its intraday high of 1,812.69 points.

Analysts said Malaysian shares have been seeing increased foreign investor demand as Malaysia's corporate earnings reporting season for the April-to-June quarter starts in earnest in August. Globally, investors also took cue from the US-China heightened trade tension as they watched Turkey's lira and Russia's rouble depreciate.

In Malaysia today, Kenanga Investment Bank Bhd head of research Chan Ken Yew told theedgemarkets.com: "Throughout this week, the (Malaysian stock) market has mainly been on the upside. But from a technical perspective, I would say that it is overbought now. So I expect there will be some market correction next week."

Earlier today, TA Securities Holdings Bhd wrote in a note: "The persistent overbought position on the index should encourage profit taking as investors look to reduce exposure ahead of the weekend."

Across Bursa Malaysia, 2.19 billion shares worth RM2.05 billion changed hands.

Top gainers included KLCI stocks Malaysia Airports Holdings Bhd and Hartalega Holdings Bhd. The most-active stocks included Malaysian Resources Corp Bhd and Frontken Corp Bhd.

Across international stock markets, Japan's Nikkei 225 fell 1.33% while Hong Kong's Hang Seng dropped 0.84% as investors took cue from the US-China trade tension as they watched Turkey's lira and Russia rouble depreciated.

Reuters reported that Turkey's lira plunged as much as 14 percent on Friday as worries about President Tayyip Erdogan's influence over monetary policy and worsening US relations snowballed into a market panic that also hit shares of European banks.

It was also reported today that the US announced a new round of sanctions on Wednesday targeting Russia that pushed the rouble to two-year lows and sparked a wider sell-off over fears Russia was locked in a spiral of never-ending sanctions.