KUALA LUMPUR (Nov 30): The FBM KLCI closed down 44.88 points or 2.79% at 1,562.71 today after diving in the final trading hour against a confluence of factors including lower crude oil prices and equity losses as investors weighed Malaysia's corporate financial results amid Covid-19 driven economic weakness.

Across Bursa Malaysia at 5pm, 9.02 billion securities were traded for RM7.71 billion.

Bursa’s Financial Services index fell the most in percentage terms at 3.22% among bourse gauges.

Top declining stocks included KLCI entities Petronas Dagangan Bhd, Public Bank Bhd, Tenaga Nasional Bhd, Petronas Chemicals Group Bhd and Malayan Banking Bhd (Maybank).

Rakuten Trade Sdn Bhd research vice president Vincent Lau told theedgemarkets.com that the drop in the KLCI today might have just been a minor pullback, after a favourable performance throughout the month of November. 

"It was probably just the month-end rebalancing of portfolios [by investors]. Market sentiment is still okay, even glove stocks have rebounded.  

"Most regional indexes are also trading at a high, so it's unsurprising to see them falling today at the end of the month,” Lau said. 

Globally, it was reported today that world shares paused to assess a record-busting month on Monday as the prospect of a Covid-19 vaccine-driven economic recovery next year and yet more free money from central banks eclipsed immediate concerns about the coronavirus pandemic.

"Markets are overbought and at risk of a short term pause,” Reuters quoted Shane Oliver, head of investment strategy at AMP Capital, as saying. "However, we are now in a seasonally strong time of year and investors are yet to fully discount the potential for a very strong recovery next year in growth and profits as stimulus combines with vaccines,” Oliver said.

On commodity markets, it was reported that crude oil prices tumbled on Monday, as investors waited for a decision by producer group OPEC+ whether to extend large output cuts to balance global markets, but vaccine hopes helped keep benchmarks on track to rise more than a fifth in November.

It was reported that January Brent crude futures, which will expire later on Monday, dropped US$1.01, or 2.1%, to US$47.17 a barrel by 0749 GMT. 

The more actively traded February Brent contract was at US$47.29 a barrel, down 96 cents, while US West Texas Intermediate crude futures for January fell 86 cents, or 1.9%, to US$44.67 a barrel.

At Bursa today, a glance at the KLCI showed that the 30-stock index started erasing intraday gains in the afternoon as investors weighed companies' quarterly financial results including those of AMMB Holdings Bhd and Malaysia Airports Holdings Bhd  (MAHB), which announced their financials during Bursa’s 12:30pm break today.

Asian equity indices, which ended lower, and the crude oil price drop could have also precipitated the KLCI’s plunge before Malaysian markets closed at 5pm.

A closer observation shows that KLCI stocks which saw a sharp price drop included Tenaga, Petronas Chemicals and Maybank.

At 5pm, Tenaga closed down 64 sen or 5.97% at RM10.08, Petronas Chemicals dropped 44 sen or 6.41% to RM6.42 while Maybank fell 39 sen or 4.7% to RM7.90.

As market observers watched the big drop in the KLCI shortly before trading ended, they would have also noticed Tenaga's and Maybank's share prices plunged about 15 minutes before the closing bell rang today. 

The KLCI had plunged today as investors looked ahead to the December 2020 semi-annual review of the FTSE Bursa Malaysia Index Series. 

In a joint statement on June 4, 2020, Bursa Malaysia and FTSE Russell announced that KLCCP Stapled Group and Telekom Malaysia Bhd would replace AMMB Holdings Bhd and MAHB in the KLCI, following the semi-annual review of the FTSE Bursa Malaysia Index Series on that day.

"The index series is reviewed semi-annually in accordance with the index ground rules. All constituent changes take effect at the start of business on Monday 22 June 2020 and the next review will take place in December 2020,”  Bursa Malaysia and FTSE Russell said then.

Prior to the June 2020 review, Bursa Malaysia and FTSE Russell said in a joint statement on December 5, 2019 that there would be no changes to the constituents of the KLCI, following the semi-annual review of the FTSE Bursa Malaysia Index Series on that day.