KUALA LUMPUR (March 23): The FBM KLCI remained in the red after the first hour of afternoon trade on renewed concern among investors of a potential trade war after US President Donald Trump announced tariffs on imports from China.

At 3.30pm, the benchmark index was down 16.19 points at 1,860.68. On the broader market, decliners outstripped gainers by 726 to 119 while 433 counters traded unchanged.

Total volume stood at 1.37 billion shares valued at RM1.28 billion.

AmInvestment Bank Bhd expects stock markets around the world to remain in jitters in the near term as investors are likely to be nervous with noises arising from the trade war issues.

Its group chief economist and head of research Dr Anthony Dass said market watchers now expect the US Federal Reserve to hike rates three times in 2018 as opposed to four previously.

"We feel that in today's complex global trade, even a mild form of trade protectionism can disrupt the global supply chain due to strong interconnections.

"Thus, we think the upward momentum in stocks may have been broken. We can expect investors in general to be more attuned to rebalancing and taking profits especially when their positions get outsized," he said.

Hong Leong Investment Bank head of retail research Loui Low Ley Yee said a huge volatility may persist over the near term on the resumption of the trade war tensions among investors.

He said traders are expecting China to react with a retaliation measures to Trump's tariffs.

"The full list of tariffs will be released within the next two weeks. This may curtail the trading interest and traders are likely to trade on a cautious tone," he said in a note.

Low said the negative sentiment could spill over towards Malaysia's stock market, where small caps and lower liners are seen as the target for reduction of equities' exposure under the cautious environment.