FBM KLCI pares gains as Malaysian economy contracts more than expected

FBM KLCI pares gains as Malaysian economy contracts more than expected
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KUALA LUMPUR (Feb 11): The FBM KLCI pared some of its gains at the close of trade today, ahead of the Lunar New Year holiday, as sentiment turned tepid on a sharper-than-expected contraction of the economy.

Malaysia’s gross domestic product (GDP) shrank further in the fourth quarter of 2020 (4Q20), registering a contraction of 3.4% compared to a decline of 2.7% in 3Q20, as the recovery of the economy was impacted by the tightening of movement restrictions.

At 12.30pm, the FBM KLCI finished 0.16% or 2.57 points higher at 1,599.42. The index had earlier risen to a high of 1,602.50.

At market close at today’s half-day of trading, the local index was up on account of gains seen in Tenaga Nasional Bhd (TNB), Axiata Group Bhd and Hong Leong Financial Group Bhd (HLFG).

TNB finished the day 3.18% or 31 sen higher at RM10.06, valuing it at RM57.39 billion. Axiata was up 1.78% or six sen at RM3.43, translating into a market value of RM31.45 billion. HLFG was 1.77% or 30 sen higher at RM17.30, yielding a market capitalisation of RM19.85 billion.

Market breadth across the local bourse was positive, with 547 counters up compared to the 452 that went unchanged and 383 that posted declines.

Total trading volume today stood at 3.21 billion shares, with a turnover of RM2.05 billion.

Top actives included the Dagang NeXchange Bhd, Sapura Energy Bhd and Trive Property Group Bhd. Top value gainers were Malaysian Pacific Industries Bhd, UWC Bhd and Genetec Technology Bhd.

Top losers were Fraser & Neave Holdings Bhd, Nestle Malaysia Bhd and Malpac Holdings Bhd.

“While banks should continue to rise on economic recovery hopes, lower liners and small caps should extend consolidation as retail participation dwindled ahead of the Chinese New Year extended weekend holiday. Immediate overhead resistance for the index stays at 1,600, with next hurdle seen from the 50-day moving average at 1,617, and stronger hurdles from 1,660 and 1,680. Key uptrend support will be the 100-day moving average at 1,571, with better supports at 1,550 and the 200-day ma at 1,541,” TA Securities Research said in a note today.

At the time of writing, Asian bourses were largely up. Japan's Nikkei 225 was up 0.19% or 57 points at 29,562.93. The Hong Kong's Hang Seng was up 0.45% or 134.85 points at 30,173.57. The Shanghai Composite was 1.43% or 51.60 points higher at 3,655.09.

Reuters reported that Malaysian shares pared gains today as its economy fell at a faster-than-expected pace in the fourth quarter, while other emerging Asian markets were muted in thin trade, with multiple countries already shut for the Lunar New Year holidays.

“Broader Asian shares rested at record highs as investors digested recent meaty gains and hoped for more global stimulus, with MSCI's broadest index of Asia-Pacific shares outside Japan up 0.1%.

Eyes were also on US President Joe Biden as he spoke to his Chinese counterpart Xi Jinping on Wednesday, his first direct contact with the leader since winning the November US presidential election and taking office last month,” the newswire reported.

Surin Murugiah