KLCI erases gains in line with cautious regional markets

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KUALA LUMPUR (Feb 11): The FBM KLCI erased its earlier gains at mid-morning today, in line with the cautious regional markets.

At 10.10am, the FBM KLCI fell 3.67 points to 1,682.85. The index had earlier risen to a high of 1,689.47.

Losers led gainers by 254 to 227, while 285 counters traded unchanged. Volume was 698.57 million shares valued at RM240.58 million.

The losers included Nestle (M) Bhd, Lysaght Galvanized Steel Bhd, Time Dotcom Bhd, Kuala Lumpur Kepong Bhd, Petronas Gas Bhd, Petronas Dagangan Bhd and Tong Herr Resources Bhd. 

The actives included Bumi Armada Bhd, JAG Bhd, Sapura Energy Bhd, Scomi Group Bhd, Prestariang Bhd, Karex Bhd, Green Packet Bhd and Nexgram Holdings Bhd.

The gainers included British American Tobacco (M) Bhd, KESM Industries Bhd, Allianz Malaysia Bhd, Heineken Malaysia Bhd, Aeon Credit Service (M) Bhd, MBM Resources Bhd, Malaysian Pacific Industries Bhd, Dufu Technology Bhd, Utusan Melayu (Malaysia) Bhd and JF Technology Bhd.

Stocks began the week on a cautious note as doubts on the possibility for progress ahead of a potentially pivotal week for U.S.-China trade talks crept back into markets, according to Bloomberg.

Resurgent worries on global growth are driving bonds higher and threatening to dent this year’s rally in riskier assets, with equities dipping last week. Shares in Sydney edged lower, while Korean stocks were little changed. Futures indicated a lower start for equities in Hong Kong. Chinese exchanges reopen after a one-week holiday during which a gauge of the country’s firms traded in Hong Kong fell. Japan is shut for a holiday, so Treasuries won’t trade until the London open after 10-year yields edged down to 2.63 percent last week, it said.

Hong Leong IB Research said following the 3-day decline in Dow, the undertone has been interrupted and an extended consolidation is likely to prevail.

It said overall, the rising uncertainty around U.S.-China trade relations and the growing worries over the global economy coincide with a deteriorating earnings outlook for 2019, as 1Q19 earnings growth estimates have shrunk to below 1% from above 5% at the start of the year.

“Key supports are near 24500-24700 while resistances are set at 25500-25800,” it said.

“The KLCI could remain choppy this week ahead of the resumption of US-China trade talk in Beijing on 14-15 Feb. Also, sentiment is likely to engage in a cautious tone as February reporting season begins.

“Overall, investors are probably looking at a more defensive situation until we have more clarity on the trade negotiations and corporate earnings outlook.

“Key resistances are pegged near 1692/1705 while supports are set at 1680/1670 levels,” it said.