KLCI falls 0.65% as sentiment turns sour on poor data

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KUALA LUMPUR (Jan 2): The FBM KLCI fell 0.65% at mid-morning today, after data showed that manufacturing activity in Malaysia in December suffered the sharpest deterioration in manufacturing business conditions since the survey began six-and-a-half years ago.

The Nikkei Malaysia Manufacturing Purchasing Managers' Index (PMI) fell to 46.8, from 48.2 in November.

At 10am, the FBM KLCI fell 10.99 points to 1,679.59.

Losers led gainers by 271 to 150, while 219 counters traded unchanged. Volume was 535.15 million shares valued at RM166.27 million.

The losers included Petronas Dagangan Bhd, MISC Bhd, Kuala Lumpur Kepong Bhd, Tenaga Nasional Bhd, Petronas Gas Bhd, Sime Darby Plantation Bhd, DiGi.Com Bhd and QL Resources Bhd.

The actives included Sapura Energy Bhd, Datasonic Group Bhd, Prestariang Bhd, My EG Services Bhd, PUC Bhd and Hubline Bhd.

The gainers included Gabungan AQRS, United Plantations Bhd, Aeon Credit Service (M) Bhd and Hong Leong Industries Bhd.

Asian shares crept cautiously higher on the first trading day of the new year as early gains in US stock futures spoke of some improvement in risk appetite, according to Reuters.

MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.14%, as E-Mini futures for the S&P 500 firmed 0.5% and Nasdaq futures 0.7%. Japan's Nikkei was closed for a holiday, it said.

Hong Leong IB Research in a traders' brief said in the US, the Dow could rebound after severe selling activities throughout the month of December, but trading activities will be focusing on the corporate earnings season that will be starting on Jan 14, which could provide direction for the markets.

"In the meantime, we expect the volatility may persist during the 90-day trade truce period as markets are still headlines driven at this moment.

"We believe the pullback on the FBM KLCI may persist over the immediate term, but based on the technical readings on the MACD (moving average convergence divergence) indicator, which suggested a bullish divergence could mean that the key index [has] limited downside risk, potentially leading to a 'January effect' bounce.

"The support will be pegged around 1,630-1,650," it said.