FBM KLCI flat amid China currency, stock cues

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KUALA LUMPUR (June 27): The FBM KLCI rose 0.48 point while the ringgit weakened against the US dollar as investors took cue from China shares' drop and a weaker yuan. At Bursa Malaysia, the KLCI settled at 1,676.34 points at 12:30pm.

Reuters reported that Asian share markets were under pressure on Wednesday as weakness in Chinese stocks and the yuan weighed on sentiment in the region, while oil climbed as the United States pressured allies to stop buying Iranian crude.

MSCI's broadest index of Asia-Pacific shares outside Japan lost another 0.3% after touching a two-year trough on Tuesday. Chinese blue chips eased 0.4% to be a whisker above 13-month lows as a settlement of Sino-US tensions remained a distant prospect.

In Malaysia, Hong Leong Investment Bank Bhd wrote in a note today: "We believe that stocks on the local front could be grossly oversold and may perform a technical rebound over the near term, in line with the 1H18 window dressing activities. Meanwhile, we believe the downside risk may persist with the ongoing trade spats between US and its trading partners."

In currency markets, the ringgit weakened to 4.0282 against the US dollar at 12:16pm.

The exchange rate so far today was between 4.0220 and 4.0290. Against the yuan, the ringgit strengthened to 0.6100 at 12:43pm after trading between 0.6085 and 0.6121.

Reuters reported that the US dollar has been aided in part by recent gains on the Chinese yuan, which had stirred speculation Beijing was weakening its currency to bolster exports. The People's Bank of China fixed the yuan midpoint at a six-month low of 6.5569 per US dollar on Wednesday. That was down 0.6% from the previous fix but actually a little firmer than market expectations.