KLCI reverses gains at 11th hour as Nestle, banks drag

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KUALA LUMPUR (Sept 18): The FBMKLCI bucked regional trend and closed 6.44 points or 0.43% lower today at 1,506.63, after an 11th-hour fall following a sharp drop in the share prices of a couple of banking component stocks.
The benchmark index dipped into the red zone shortly after the opening bell this morning, but quickly rebounded and spent most of the trading day in the positive territory.
The gains, however, were erased when declines at Public Bank Bhd and Malayan Banking Bhd dragged the index into the red, as the trading hours drew to a close.
Public Bank, which was the fourth top decliner across the bourse today, closed 56 sen or 3.39% lower at its almost three-week low of RM15.94, while Maybank retreated 16 sen or 2.17% to settle at RM7.21.
Also weighing on the index was Nestle (Malaysia) Bhd, which sank RM1.60 or 1.14% to close at RM139. It was the biggest loser of the day.
Affin Hwang Investment Bank Bhd reminsier Loo Boon How told theedgemarkets.com that the selling pressure on banking counters arose from concerns about bank earnings coming under pressure, amid the current low interest rate and challenging economic environment.
Loo, who noted a decline in trading volume, also expects the KLCI to consolidate further with even lower trading volume in the next two weeks as the end of the loan moratorium nears, as he believes retail investors will cash out from the equities market to resume their loan payment.
Notwithstanding that, he expects the KLCI to still remain above the 1,500 level next week.
A total of 6.87 billion shares worth RM5.07 billion were traded today, compared to the 7.53 billion shares worth RM6.2 billion recorded yesterday.
Market breadth, however, was positive, as 592 counters closed higher against 408 decliners. Among top gainers were Heineken Malaysia Bhd, Petronas Dagangan Bhd, Khind Holdings Bhd, Scientex Bhd and Genting Plantations Bhd.
Elsewhere in Asia, Japan's Nikkei 225 rose 0.18%, while South Korea's Kospi gained 0.26%. In China, the Hong Kong Hang Seng Index closed 0.47% higher, while the Shanghai Stock Exchange Composite Index rose 2.07%.
Reuters reported Asian stocks inched up on Friday, though lingering disappointment that central banks merely affirmed their monetary support this week with no new stimulus promised, had kept a lid on gains.
“Oil rose after OPEC flagged a crackdown on members that did not cut output, and the dollar was back to the bottom of its recent range, following its brief journey higher after Wednesday’s Federal Reserve meeting,” it reported.

It added that while the Fed promised to keep rates low for a long time, it gave no new hints about any further monetary support.

Tan Choe Choe