KLCI closes lower amid rising political uncertainties after PM's resignation

KLCI closes lower amid rising political uncertainties after PM's resignation
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KUALA LUMPUR (Aug 16): The FBM KLCI slipped 2.21 points or 0.15% to close at 1,502.9 today, following news that Prime Minister Tan Sri Muhyiddin Yassin and his entire Cabinet have resigned, which drew his turbulent 17-month premiership to an abrupt end.

The FBM KLCI was in the red throughout the day, as it hovered between 1,493.6 and 1,502.9. The benchmark index closed at 1,505.11 last Friday (Aug 13).

Market breadth was negative overall with 629 losers against 377 gainers, while 426 counters were unchanged. A total of 5.04 billion shares worth RM2.36 billion were traded.

Rakuten Trade Research vice-president Thong Pak Leng said the Malaysian stock market ended lower mostly because political uncertainty has dampened investors' confidence. “Though the manufacturing sector under non-essential services are allowed to resume operation is positive news to the market, today’s upside has been capped by the selling pressure due to the political scene,” he said.

Nonetheless, he observed some bargain-hunting activities emerged towards the later part of the trading session, which erased most of today's earlier losses and sent the benchmark closing above 1,500.

For the rest of the week, he expects the FBM KLCI to hover around 1,500, with key support at 1,475, and resistance at 1,510.

“For short-term traders, in view of the market volatility and jittery sentiment, I suggest they reduce trading size and save bullets to add [later] should there be more clarity or better signals from the market,” he added.

Among notable top losers of the day were Hartalega Holdings Bhd and Kuala Lumpur Kepong Bhd (KLK). Hartalega dropped 28 sen or 3.93% to RM6.85, while KLK shares fell 60 sen or 2.97% to RM19.58.

Other top losers included Sam Engineering & Equipment (M) Bhd, Genetec Technology Bhd, Malaysian Pacific Industries Bhd, Vitrox Corp Bhd, Widetech (M) Bhd, Pentamaster Corp Bhd, Dutch Lady Milk Industries Bhd and Transocean Holdings Bhd.

The top gainers were P.I.E. Industrial Bhd, Rapid Synergy Bhd, Heineken Malaysia Bhd, KESM Industries Bhd, Kobay Technology Bhd, Petronas Dagangan Bhd, Tafi Industries Bhd, Sime Darby Plantation Bhd, MSM Malaysia Bhd and Ge-Shen Corp Bhd.

Avillion Bhd topped the actives list, with 654.4 million shares traded. It took up 13% of the day's total trading volume of 5.04 billion shares. The stock closed two sen or 10.53% higher at 21 sen.

This was followed by Dagang NeXchange Bhd, AT Systematization Bhd, Fintec Global Bhd, Advance Synergy Bhd, KNM Group Bhd, Malayan United Industries Bhd, Kanger International Bhd and  Impiana Hotels Bhd.

Reuters reported that global shares slid on Monday after a raft of Chinese economic indicators showed a surprisingly sharp slowdown in the engine of global growth, just as much of the world races to stem the spread of the Delta variant of Covid-19 with vaccinations.

In Asia, Japan's Nikkei 225 dived 1.62%, while Seoul's Kospi tumbled 1.16%. In China, Hong Kong’s Hang Seng Index fell 0.8% while the Shanghai Stock Exchange Composite Index closed marginally up 0.03%.

Tan Choe Choe