FBM KLCI slips 17.43 points as trade tension hurts China shares

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KUALA LUMPUR (June 21): The FBM KLCI slipped 17.43 points or 1.02% as Asian shares took cue from China equities' drop amid the US-China trade tension. The ringgit weakened further.

At 5pm, the KLCI closed at 1,692.32 points after falling to its intraday low at 1,681.89 points. The KLCI closed lower as index-linked counters including Petronas Dagangan Bhd, Hong Leong Bank Bhd and Telekom Malaysia Bhd ended among Bursa Malaysia's top decliners.

“There isn’t any positive news in the market, and right now, it is likely to continue further downward,” Hong Leong Investment Bank Bhd head of retail research Loui Low Ley Yee told theedgemarkets.com.

“The lull is likely to stay on until there is further clarity. A full blown trade war is expected to result in slower growth,” he said.

In China, the Shanghai Stock Exchange Composite dropped 1.37% while Hong Kong’s Hang Seng Index was down 1.35%. Elsewhere, South Korea's Kospi fell 1.1% while Japan's Nikkei 225 rose 0.61%.

Reuters reported that shares crept higher in most major markets on Thursday as a lull in the Sino-US trade tussle and talk of more stimulus in China helped calm nerves, though the nagging trade tensions caused Chinese shares to slip, dragging other Asian markets lower. Japan's Nikkei share average rose on Thursday as concerns over China-US trade issues that hit markets early this week appeared to recede, while technology stocks rallied on the back of Nasdaq's strong performance.

In currency markets, the ringgit weakened to 4.0165 against a strengthening US dollar at the time of writing. Reuters reported that all emerging Asian currencies weakened against a firming dollar on Thursday, as comments by the US Federal Reserve chairman on the pace of rate hikes and a pick-up in U.S. yields fuelled the greenback.