KUALA LUMPUR (Dec 1): The FBM KLCI closed 42.62 points or 2.34% lower today, dragged down by oil and gas (O&G) counters following Petroliam Nasional Bhd’s (Petronas) announcement to cut its 2015 capital expenditure (capex) amid falling oil prices.

The benchmark index settled at 1,778.27 points at 5pm today.

Petronas announced last Friday that it is cutting capex in 2015 by 15%-20% due to falling oil prices and this has caused O&G counters to drop an average of 15% across the board, an equity analyst told theedgemarkets.com over the telephone.

However, this is only a knee jerk reaction and some recovery is likely over the week, he added.

Bursa Malaysia saw a total of 2.74 billion shares traded, with a value of RM2.94 billion.

There were 82 gainers and 981 decliners, while 150 counters remained unchanged.

Today’s top gainers included British American Tobacco (M) Bhd, Panasonic Manufacturing (M) Bhd and AirAsia Bhd.

Meanwhile, decliners were led by Petronas Gas Bhd, Petronas Dagangan Bhd and Carlsberg Brewery (M) Bhd.

The most actively traded stock today was SapuraKencana Petroleum Bhd with about 91 million shares changing hands.

Regionally, Hong Kong’s Hang Seng declined 2.58%, Japan’s Nikkei was up 0.75% while South Korea’s Kospi was marginally lower by 0.79%.

According to Reuters, oversupply in Asia’s factories have met with lack of global demand and this has piled pressure on prices of manufactured goods and commodities used to make them.

“Oil sank to its lowest in over five years on Monday, with the industrial bellweather copper not far behind. The rout spread to gold and silver while the US dollar cleared seven-year peaks on the Japanese yen,” it said.  

According to Bloomberg, citing Phil Flynn, a senior market analyst at the Price Futures Group in Chicago, the West Texas Intermediate “will see a test of US$60 soon”.

“It’s clear that a production war is on and it will be survival of the fittest,” he said.