KLCI finishes down 1.06% as China’s plan to tighten grip on HK batters markets

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KUALA LUMPUR (May 22): The FBM KLCI finished down 15.35 points or 1.06% at 1,436.76, while Bursa Malaysia’s energy index fell by a larger quantum as news of China’s plan to impose a new national security law on Hong Kong to tighten its grip on the latter battered world equity and crude oil markets.

Bursa’s energy index, which tracks shares in oil and gas (O&G)-related companies, fell 33.19 points or 4.05% to 786.51 at 5pm to become the largest percentage decliner across the exchange’s indices after broad-based selling across the bourse.

TA Securities Holdings Bhd technical analyst Stephen Soo said negative sentiment in the Hong Kong market after China proposed a new security law as well as heightened tensions between China and the US had a spillover effect on the local market. 

"Coincidently, the KLCI was due for a correction following a bull run for the past seven straight trading days,” Soo said today.

Across Bursa today, decliners led gainers by 801 to 289, while securities trade volume across the bourse stood at 6.69 billion shares valued at RM4.19 billion as investors looked ahead to the Hari Raya Aidilfitri holidays next week.

Today, Bursa's top gainers and most active stocks included Datasonic Group Bhd after its share price jumped in the final trading hour. Datasonic’s share price closed up 21 sen or 15.67% at RM1.55 with some 112 million shares traded.

The leading decliner was British American Tobacco (Malaysia) Bhd as its share price ended down RM1.58 or 11.88% at RM11.72.

Malaysian shares fell with Asian equity indices. In China, Hong Kong’s Hang Seng closed down 5.56% while the Shanghai Stock Exchange Composite fell 1.42%.

Elsewhere, Japan's Nikkei 225 closed down 0.8%, while South Korea's Kospi fell 1.41%.

It was reported that global shares tumbled today as Hong Kong's political unrest returned as a flashpoint in fast-deteriorating US-China relations, following Beijing's move to impose a new security law on the city.

Quoting analysts, Reuters reported that rising tensions between the US and China over trade and Beijing's plan to implement national security legislation in Hong Kong were hitting oil and other markets.

 

"Oil prices fell today as tensions rose between the US and China, and as Beijing failed to set a target for economic growth this year, stoking concern that the Covid-19 pandemic will overshadow fuel demand in the world's second-largest oil user.

"Brent crude was trading down US$1.43 (RM6.24), or 4%, at US$34.63 a barrel by 0630 GMT, after falling to as low as US$33.54. West Texas Intermediate (WTI) crude dropped by US$1.81, or 5.3%, to US$32.11 a barrel, having slumped to US$30.72 earlier,” Reuters reported.

In Malaysia next week, markets will be closed on Monday and Tuesday (May 25 and 26) in conjunction with the Hari Raya Aidilfitri celebrations which fall on Sunday (May 24) and Monday.

"Bursa Malaysia and its subsidiaries will resume operations on Wednesday, May 27,” the bourse operator and regulator said in a statement.