Equities erase gains after rising with crude oil prices

Equities erase gains after rising with crude oil prices
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(report updated)

KUALA LUMPUR (April 23): The FBM KLCI closed down 0.25 point or 0.02% at 1,381.64 today, after erasing gains in volatile trade. The volatility stems from optimism as equities rose with crude oil prices at above UDS$20 a barrel and as investors continued to be mindful of the Covid-19 pandemic’s impact on world economy.

Across Bursa Malaysia at 5pm, a total of 5.05 billion shares were traded for RM2.58 billion. There were 462 gainers and 376 decliners.

"The local market should bounce back along with the rebound on overnight Wall Street and oil markets, but sentiment may still be clouded by concerns over the negative economic impact from the oil price collapse and continued lockdowns in neighbouring countries,” TA Securities Holdings Bhd wrote in a note earlier today.

At Bursa, volatile trades today saw the KLCI rising to its intraday high at 1,395.34, before falling to its intraday low at 1,378.78. The KLCI ended lower, after profit taking in the final trading hour.

Across Bursa, top decliners included KLCI stocks Hong Leong Financial Group Bhd and Tenaga Nasional Bhd.

Top active stocks included oil and gas-related Sapura Energy Bhd, which saw some 92 million shares traded. Sapura Energy’s share price closed up 0.5 sen or 5.88% at nine sen.

Bursa’s energy index, which tracks shares of oil and gas companies, ended up 10.10 points or 1.51% at  679.17, as global shares rose with crude oil prices.

Reuters reported Asian stock markets rose on Thursday, as the combination of a rebound in crude prices from historic lows and the promise of more U.S. government aid to cushion the coronavirus-ravaged economy, helped calm nervous markets.

It was reported better-than-expected U.S. corporate earnings also lifted equities, though overall sentiment remained fragile as the pandemic cut a destructive path through the world economy.

Oil surged on Thursday, amid signs that producers are cutting production to weather a collapse in demand, as the coronavirus outbreak ravages world economies, while the U.S. state of Oklahoma also moved to help oil firms pump less.

Analysts warned the rise could be temporary as storage tanks fill around the world, but prices recovered ground, as investors reassessed the resilience of the world's economy amid the global health emergency.

"Brent crude was up 99 cents or 15% at US$21.36 a barrel by 0506 GMT, after rising more than 5% on Wednesday. U.S. West Texas Intermediate (WTI) futures were up 98 cents or more than 7% at US$14.76 a barrel, having risen around a fifth in the previous session. U.S. crude futures fell to below minus US$40 on Monday, on concerns that buyers were running out of storage space to take deliveries,” Reuters reported.