KUALA LUMPUR (July 8): The FBM KLCI settled up 8.7 points or 0.56% at 1,575.42 during Bursa Malaysia’s afternoon break today, helped partly by the sharp rise in banking shares as investors weigh the impact of Bank Negara Malaysia’s overnight policy rate (OPR) cut on the broader market.

Across Bursa Malaysia at 12:30pm, 6.17 billion shares worth RM2.17 billion were traded as investors bargain hunted for beaten-down stocks. Top gainers included KLCI constituents Public Bank Bhd and Petronas Dagangan Bhd.

The KLCI settled up on bargain hunting after falling to its intraday low of 1,562.08. Public Bank's share price rose 42 sen or 2.41% to RM17.40 after dropping to its intraday low of RM17.28 while Petronas Dagangan climbed 38 sen or 1.87% to RM20.66. 

Earlier today, the KLCI opened down on profit taking and after US equity indices closed lower in Tuesday overnight trades on rising global Covid-19 infections concerns.

"Wall Street experienced a pull-back citing fears of the rising coronavirus cases in the US. The Dow Jones Industrial Average lost almost 400 points to close below the 26,000 level. Therefore, we reckon regional markets may see some form of correction today. On the local front, we expect profit taking to continue following the robust performance over the past week. As such we expect the KLCI to take a breather again today and trend on a narrow range of between 1,555/1,565 range,” Rakuten Trade Sdn Bhd analysts wrote in a note today.

Overnight, it was reported that US stocks fell on Tuesday, adding to losses into the close, as investors took profits a day after the S&P 500 logged its longest streak of gains this year and as new US coronavirus cases rose further. "Large parts of the US reported tens of thousands of new coronavirus infections. New York expanded its travel quarantine for visitors from three more states, while Florida's greater Miami area rolled back its reopening,” Reuters reported.

Yesterday, Bank Negara cut the OPR by 25 basis points to a record low of 1.75%, saying that the impact of the Covid-19 pandemic on the global economy is severe and that Malaysia’s economic activity contracted sharply in the second quarter of the year due to measures introduced to contain the pandemic.

In a statement, the central bank said Malaysia’s inflationary pressures are expected to be muted in 2020.