KUALA LUMPUR (March 5): The FBM KLCI fell with Asian shares following US President Donald Trump's announcement that the US will impose import taxes on steel and aluminium to protect US manufacturers. At 4pm, the FBM KLCI dropped 15.08 points to 1,840.99.

Hong Leong Investment Bank wrote in a note today that "stocks on the local (Malaysia) front are likely to extend the sideways consolidation phase on the back of uncertain actions from Trump that may turn into a trade war".

"Moreover, investors may continue their profit-taking activities on steel and aluminium producers. The KLCI is likely to range between 1,850-1,865," Hong Leong said.

Last week, Reuters quoted Trump as saying the duties of 25% on steel and 10% on aluminium would be formally announced this week. Today, it was reported that Asian investors dumped shares and drove to the safety of the yen and gold on Monday amid fears of a global trade war and worries of political uncertainty in Italy, risks that cloud the outlook for world growth.

Italian voters delivered a hung parliament on Sunday, flocking to anti-establishment and far-right parties in record numbers and casting the euro zone's third-largest economy into a political gridlock that could take months to clear.

In the US, Trump's proposed tariffs on imported steel and aluminium met with warnings of retaliation from the rest of the world over the weekend.