KLCI up 10.66pts; Ringgit weakens to new levels

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KUALA LUMPUR (Sept 10): The FBM KLCI erased losses on bargain hunting while the ringgit strengthened after depreciating to fresh levels.  

At 5pm, the KLCI gained 0.7% to close at 1,614.02 points. The index had earlier fallen to an intraday low of 1,586.84 as Asian markets contended with less optimistic economic data from China and Japan.

In China, Hong Kong's Hang Seng fell 2.57% while Japan's Nikkei 225 dropped 2.51%. Reuters reported today that Asian stocks fell after lacklustre Chinese and Japanese economic data heightened worries about slackening global growth, sapping investors' appetite for riskier assets.

Bursa Malaysia saw 1.83 billion shares worth RM2.022 billion traded. Decliners beat gainers at 422 against 354 while 302 counters remained unchanged.

Top gainers included British American Tobacco (M) Bhd and Genting Bhd. Leading decliners included Metal Reclamation Bhd and Nestle Malaysia Bhd while the most-active stock was AirAsia Bhd.

In currency markets, the ringgit strengthened to 4.3127 against the US dollar after depreciating to a fresh level at 4.3790 earlier today.

Compared to the Singapore dollar, the ringgit was traded at 3.0499 after weakening to a new point at 3.0771.

Analysts expect more volatility in capital flows as countries depreciate their currencies to maintain export advantage following China's yuan devaluation. Such sentiment will weigh down the ringgit, they said.

A research head at a local investment bank said despite continuous foreign net selling in Malaysia's equities, the outflow was, however, decreasing.

"Hopefully, it will stabilise, then the (market's) rebound will be more sustainable. Investors are also waiting to look at the outcome of the US Federal Open Market Committee (FOMC) meeting next week," he told theedgemarkets.com.

The FOMC is closely watched in anticipation of US interest rate hikes, which will result in demand for US dollar-denominated asset, hence, a stronger US dollar.

In Malaysia tomorrow, investors will be eyeing Bank Negara Malaysia's monetary policy statement in the evening. Bank Negara had maintained its overnight policy rate at 3.25% in July this year.

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