KUALA LUMPUR (Aug 6): The FBM KLCI slid 0.34 point or 0.02% after China's proposed retaliatory tariffs of between 5% and 25% on US goods hit Asian shares. At 5pm, the KLCI closed at 1,779.75 points after volatile trade as investors evaluated the latest turn of events concerning the China-US trade war.
China's proposed retaliatory tariffs on US goods followed the US' plan for a higher 25% tariff on US$200 billion worth of Chinese imports from a previously proposed 10%.
In Malaysia, Inter-Pacific Research Sdn Bhd research head Pong Teng Siew told theedgemarkets.com that fluctuations between gains and losses seen in KLCI-linked stocks today were mainly due to uncertainties surrounding the escalating trade tension.
“The jury is still out whether we (Malaysia) would benefit from this. Any signs of backing down on either sides would be positive, but it seems that the trade tension between US and China are now escalating from one level to another,” said Pong.
Across Asia, the Shanghai Stock Exchange Composite Index was down 1.29% while Japan’s Nikkei 225 and South Korea’s Kospi lost 0.08% and 0.05% respectively. Meanwhile, Hong Kong’s Hang Seng pared gains to finish 0.52% higher.
Reuters reported that Asian shares pared gains on Monday as Chinese stocks swung into negative territory, dragged lower by the escalating Sino-US trade war, though Beijing's efforts to stop sharp declines in the yuan helped support the currency.
MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.3 percent, after having risen about 1 percent earlier in the day.
Reuters reported that the trade dispute remains a live issue for markets with China proposing tariffs on US$60 billion worth of US goods on Friday, while a senior Chinese diplomat cast doubt on prospects of talks with Washington to resolve the bitter trade conflict.
Across Bursa Malaysia, 2.12 billion shares worth RM1.7 billion were traded. Top decliners included United Plantations Bhd, Hong Leong Financial Group Bhd and Gamuda Bhd.
Gamuda shares fell 16 sen to RM3.72 as investors evaluated Pengurusan Air Selangor Sdn Bhd's proposed RM2.55 billion cash offer to take over Syarikat Pengeluar Air Sungai Selangor Sdn Bhd.