KLCI extends losses as crude oil prices fall further

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KUALA LUMPUR (Dec 9): The FBM KLCI fell 2.74 points or 0.16% to close at 1,738.10 on lower crude oil prices and prospect of a weaker ringgit.

The ringgit was traded at 3.4833 versus the US dollar at 4.50pm while Brent crude fell to US$65.71 a barrel and US oil slipped to US$62.86 at 4.25pm.

Fund managers said the weakening ringgit versus the US dollar made many investors hesitant to enter the Malaysian market.

"Oil prices, which slipped into the bearish market over the past month, has dampened market sentiment," a fund manager told theedgemarket.com over the phone.

The KLCI had fallen on losses in stocks like SapuraKencana Petroleum Bhd and plantation entity PPB Group Bhd.

The KLCI's decline followed yesterday's 8.53 points or 0.49% drop.

Today, the fund manager said the KLCI would likely continue to trade in the red in the absence of catalysts.

"I do not see any near-term catalyst," he said.

Across the stock exchange, decliners led gainers by 647 to 216 while 239 counters traded unchanged. Volume was 1.44 billion shares valued at RM1.7 billion.

Top decliners included Aeon Credit Service (M) Bhd, Petronas Gas Bhd and United Plantations Bhd.

Compugates Holdings Bhd was the most actively traded counter

Top gainers included Hong Leong Capital Bhd, Panasonic Manufacturing Malaysia Bhd and Hong Leong Bank Bhd.

Across the region, Japan's Nikkei fell 0.68% while Hong Kong's Hang Seng Index weakened by 2.34%

Reuters reported that oil prices are likely to remain around $65 a barrel for the next six to seven months until the global economy recovers or the Organization of the Petroleum Exporting Countries changes its production policy.

Oil prices, which slipped into bearish market also pressured commodity-linked currencies and most Asian shares as a bout of risk aversion rippled through world markets.