Malaysian equities seen tracking US gains but cheaper oil may dent sentiment

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KUALA LUMPUR (Feb 11): Malaysian equities may track overnight US stock gains but a sharp fall in crude oil prices may curb sentiment on oil and gas (O&G)-related shares and the ringgit today.

Investors may also assess the impact of Malaysia's highest court decision yesterday to reject opposition leader Datuk Seri Anwar Ibrahim's appeal against his sodomy conviction. Anwar faces a five-year jail term after his appeal was rejected.

Yesterday, the FBM KLCI fell 0.46 point or 0.03% to 1,811.12.

Reuters reported that U.S. stocks rose on Tuesday on hopes that Greek debt negotiations could result in a deal that stabilises Europe, while Apple helped lift the S&P 500 and Nasdaq as it became the first U.S. company worth more than US$700 billion.

The Dow Jones Industrial Average rose 139.55 points, or 0.79 percent, to 17,868.76, the S&P 500 gained 21.85 points, or 1.07 percent, to 2,068.59 and the Nasdaq Composite added 61.63 points, or 1.3 percent, to 4,787.65.

Crude oil prices fell for the first time in four sessions on Tuesday after the International Energy Agency warned that ample supplies will raise global inventories before investment cuts begin to significantly dent production.

U.S. March crude futures fell US$2.84, or 5.37 percent, to settle at US$50.02 a barrel, after dropping to US$49.86. Brent March crude fell US$1.91, or 3.3 percent, to settle at US$56.43 a barrel, having fallen as low as US$56.11.

In Malaysia, lower crude oil prices may dent sentiment on O&G shares such as SapuraKencana Petroleum Bhd besides actively-traded KNM Group Bhd and Sumatec Resources Bhd.

The ringgit will also be closely watched as crude oil is a major component of the Malaysian economy.

The ringgit was last traded at 3.5792 versus the US dollar and compared to the Singapore dollar, the ringgit changed hands at 2.6443.

Against the US dollar, the ringgit has weakened to current levels from 3.1415 on August 28 last year.