KLCI dips 0.6% on profit taking, loss at banking stocks

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KUALA LUMPUR (Dec 24): The FBMKLCI fell 0.6% at mid-morning on Thursday as profit taking as well as the gloomy outlook for banking stocks weighed on the local market.

At 10am, the FBM KLCI fell 10.51 points to 1,738.54.

The top losers included British American Tobacco (M) Bhd, Public Bank Bhd, Fraser & Neave Holdings Bhd, PPB Group Bhd, Hong Leong Bank Bhd, Genting Plantations Bhd, Malaysia Airports Holdings Bhd, Lafarge Malaysia Bhd, Sime Darby Bhd, Hong Leong Financial Group Bhd and RHB Capital Bhd.

The actives included Compugates Technmology Holdings Bhd, Hubline Bhd, Icon Offshore Bhd, Technodex Bhd, Tiger Synergy Bhd and Perisai Petroleum Teknologi Bhd.

The gainers included Tasek Corporation Bhd, United Plantations Bhd, KPJ Healthcare Bhd, Top Glove Corporation Bhd, Uzma Bhd, GD Express Carrier Bhd, Pestech International Bhd, Guiness Anchor Bhd and Telekom Malaysia Bhd.

Regionally, Japanese stocks rallied and the dollar stood tall on Wednesday thanks to surprisingly robust U.S. economic growth, helping investors head into the Christmas holidays in a more relaxed mood after the global markets turbulence of the past two weeks, according to Reuters.

Risk appetite got a helping hand from revised data showing the U.S. economy grew at a 5.0 percent clip in the third quarter, its quickest pace in 11 years and the strongest sign yet that growth has decisively shifted into higher gear, it said.

Jupiter Securities Sdn Bhd chief market strategist for Benny Lee said that technically, the FBM KLCI was still in a downtrend despite the sharp rebound last week.

He said the index was still below the short-term 30-day moving average at 1,773 points and the long-term 200-day moving average at 1,843 points.

Lee said both these moving averages were declining.

“Furthermore, the index is also below the Ichimoku Cloud indicator. However, the Cloud is narrow and this indicates that the index can be volatile and can easily change direction.

“The Cloud remains narrow in the next two weeks,” he said.

Lee also said that the bullish momentum last week may continue this week but there may be resistance and hence would probably be a subdued bullish week.

He said the market may face resistance when the index approaches the 1,760-point level, which was previously a support level.

“Therefore, the index is not out of the bearish trend unless it can break and stay above 1,760 points.

“With the year coming to an end, we expect the market to be window-dressed but this only benefit blue-chip stocks supported by local institutions.

“The retail market would probably stay out until the rest of the year and foreign institutions may continue to sell,” said Lee.