KUALA LUMPUR (Aug 21): The FBM KLCI erased gains at the eleventh hour, as China economic growth concerns hit global commodity, currency and share markets. The ringgit depreciated to fresh levels.

At 5pm, the KLCI fell 2.74 points or 0.2% to close at 1,574.67 points, dragged down by banking stocks like Public Bank Bhd and RHB Capital Bhd. SapuraKencana Petroleum Bhd also fell, amid lower crude oil prices.

RHB Research Institute Sdn Bhd research head Alexander Chia said: "The market will track crude oil (prices). If oil prices slide further, then it will drag market further."

Earlier, the KLCI, which opened in negative territory, fell to its intraday low at 1,557.01, before rising to its intraday high at 1,583.38.

At 5pm, Bursa Malaysia decliners led risers at 470 to 330. A total of 1.79 billion shares, worth RM2.13 billion, changed hands.

Petronas Dagangan Bhd led gainers, while Public Bank Bhd and RHB Capital Bhd ended among top decliners.

KLCI-linked put warrant FBMKLCI-HK was the most actively-traded counter, followed by AirAsia Bhd.

Malaysian shares tracked Asian equity losses. Japan's Nikkei 225 fell 2.98%, South Korea's Kospi declined 2.01%, while Hong Kong's Hang Seng dropped 1.53%.

Reuters reported today that stock markets tumbled on Friday, after a survey showed Chinese factories contracted at their fastest pace since the depth of the global financial crisis in 2009, sending investors scurrying to the safety of bonds and gold.

Emerging market assets took a hammering, and oil prices were on track for their longest losing streak since 1986, as fears of a China-led deceleration in global growth, gripped markets.

China's woes continued to roil commodities. Oil resumed its downward trend. U.S. crude was at a more than 6-year low, on track for its eight straight weekly decline, as it slipped 0.5 percent to $40.85.

In currency markets, the ringgit weakened to a fresh level against the US dollar of 4.1895. The ringgit also depreciated to a new level against the Singapore dollar at 2.9736.

RHB's Chia said investors were concerned that should the ringgit depreciate further, Malaysian authorities might impose capital control measures.

"The market is still concerned that the sliding ringgit will result in some sort of currency control being introduced," Chia said.
 
Yesterday (Aug 20), Prime Minister Datuk Seri Najib Tun Razak and Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said the central bank had no plans to peg the ringgit against the US dollar, which had strengthened in anticipation US interest rates would rise this year.

Zeti said the ringgit was not the only currency which had weakened against the US dollar, as other currencies had also depreciated against the greenback.