FBM KLCI falls 0.51% as Asian stocks tumble

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KUALA LUMPUR (Sept 15): The FBM KLCI fell by 0.51% or 8.4 points as Asian stocks in general, tumbled on uncertainties surrounding the effectiveness of unconventional easy monetary policies to stimulate growth.

The benchmark index settled at 1,652.99 as at market close today, after touching an intraday low of 1,650.9 in the morning.

Reuters reported that while expectations over a Federal Reserve rate hike at next week’s meeting have faded, investors are bracing for a tightening before year-end.

“Perceived limits to the extensive monetary easing led by major central banks such as the European Central Bank and the Bank of Japan, have also soured broader risk sentiment, driving global debt yields to multi-month highs earlier this week,” it said.

Japan’s Nikkei 225 slumped by 1.26%, while Shanghai’s Stock Exchange Composite fell 0.68%. Hong Kong’s Hang Seng edged up by 0.63%, while Singapore’s STI slipped by 0.12%.

Across Bursa Malaysia, trading volume was thin with 1.33 billion shares, worth RM2.32 billion, exchanging hands. There were 397 gainers against 369 counters that fell, while 385 counters closed unchanged.

The top gainer was Time Dotcom Bhd, while Dutch Lady Milk Industries Bhd was the leading decliner. Sanichi Technology Bhd was the most active counter today, with 48.5 million shares traded.

RHB Research Institute head of research Alexander Chia said foreign selling continued in the market, given the recent pullback, especially in the U.S. market.

“The June quarter results weren’t that great and the general market is looking at cutting earnings forecast. The market P/E is also high, with not much upside. It is trading at a forward P/E band that is well above its 10-year mean. In the short-term, it is possible that the market will go down,” Chia added.