KUALA LUMPUR (Aug 6): The FBM KLCI had today closed up 1.38 points and 0.09% after index-linked stocks including Top Glove Corp Bhd and Hartalega Holdings Bhd rose on bargain hunting as the ringgit weakened against a backdrop of escalating US-China trade war.

At 5pm, the KLCI closed at 1,611.79 after falling to its intraday low of 1,588.98 with Asian shares. Global equities fell after US President Donald Trump's claim that China is a currency manipulator led to expectation of a protracted trade war between both nations.

In Malaysia, Malacca Securities Sdn Bhd senior analyst Kenneth Leong told theedgemarkets.com: "We are seeing some buying interest in rubber glove makers such as Hartalega and Top Glove as the ringgit continues to depreciate against the US dollar."

Export-based Top Glove and Hartalega sell their gloves in US dollars. As such a weaker ringgit against the US dollar leads to anticipation of higher earnings for these companies when their US dollar-denominated income is converted into the Malaysian currency.

At Bursa Malaysia today, Top Glove's share price closed up seven sen or 1.55% at RM4.59 while Hartalega closed 19 sen or 3.91% higher at RM5.05. In currency markets, the ringgit weakened to 4.1910 against the US dollar at the time of writing.

The KLCI bucked the region's share drop as US-China trade sentiment hit world markets. In China, the Shanghai Stock Exchange Composite closed down 1.56% while Hong Kong's Hang Seng fell 0.67%.

Elsewhere across Asia, Japan's Nikkei 225 dropped 0.65% while South Korea's Kospi fell 1.51%

Reuters reported that global stocks extended already substantial losses on Tuesday, after Washington tagged China a currency manipulator, shaking fragile investor sentiment in a rapid escalation of the US-China trade war.

It was reported that safe-haven assets, including bonds and some currencies such as the yen and Swiss franc, benefited as investors scurried to avoid risk.

On Monday, theedgemarkets.com reported that the KLCI closed 16.35 points or 1.01% lower, while small market capitalisation stocks fell by larger quantum, amid the spectre of a protracted trade war, after Trump said the US will impose a 10% tariff on the remaining US$300 billion of Chinese imports.

It was reported that such sentiment hit the ringgit after China allowed the yuan to weaken past the key 7-per-US-dollar mark on Monday, for the first time in more than a decade, in an apparent response to Trump's tariff threat.