KUALA LUMPUR (July 11): The FBM KLCI fell 0.37% at mid-morning today as the U.S. re-ignited fears of a larger scale trade war with China after announcing it would impose added tariffs on Chinese imports.
At 10am, the FBM KLCI fell 6.26 points to 1,680.87.
Losers led gainers by 365 to 103, while 246 counters traded unchanged. Volume was 545.34 million shares valued at RM329.84 million.
The top losers included British American Tobacco (M) Bhd, Top Glove Corp Bhd, Petronas Dagangan Bhd, Axiata Group Bhd, Kossan Rubber Industries Bhd, Hai-O Enterprise Bhd and Allianz Malaysia Bhd.
Asian stocks retreated and perceived safe havens such as the yen and U.S. Treasuries rose on Wednesday after the United States said it would impose tariffs on an extra 200 billion worth of Chinese imports, sharply escalating the trade war between the world's two biggest economies, according to Reuters.
Washington decided to impose the extra tariffs after efforts to negotiate a solution to the dispute failed to reach an agreement, senior administration officials said on Tuesday, it said.
Hong Leong IB Research in a traders’ brief said in the US, market tone could extend its positive trading in the short term amid rosy expectations of a strong US economy and the 2Q18 report cards as the trade tensions took a backseat.
“However, following the strong surge in the Dow, it may face with mild profit taking activities after staging a relief rally from monthly low of 23997 on June 28. Key resistances are near 25000-25300.
“On the back of positive undertone from Wall Street overnight, Bursa Malaysia is envisaged to trend higher while worries of an ongoing trade war took a backseat.
“Although the ongoing strong U.S. growth is leading the global expansion and powering corporate earnings, as the tariffs announced so far are unlikely to have a significant impact on the overall U.S. or global economy, the danger is that a cycle of tariffs and retaliatory tariffs may turn into a spiral, which may restrict the oversold technical rebound. Stiff resistances are 1,700-1,710,” it said.