KLCI plunges 1.51% as glove makers come under heavy selling

KLCI plunges 1.51% as glove makers come under heavy selling
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KUALA LUMPUR (Jan 4): The FBM KLCI slumped 26.64 points or 1.51% to 1,602.57 on the first trading day of 2021 amid heavy sell down in glove counters.

Rakuten Trade Sdn Bhd head of research Kenny Yee attributed this to the resumption of regulated short selling on Bursa Malaysia with effect from today.

The bourse had imposed a ban on short selling of equities from March 24 last year during the global market rout.

“I think market volatility will continue until the volatility for glove counters subsides. We believe there will be buying support when index dips below 1,600,” Yee told theedgemarkets.com.

On the broader market, 934 counters closed lower versus 360 that climbed, while 331 others were unchanged. Total share volume was 7.42 billion shares worth RM5.89 billion.

Glove makers were among the top losers, with Top Glove Corp Bhd plummeting 62 sen or 10.13% to RM5.50. The counter, which saw 347.86 million shares changing hands, was the most actively traded stock today.

Hartalega Holdings Bhd tumbled RM1.66 or 13.67% to RM10.48, making it the top loser in terms of value. Supermax Corp Bhd fell 50 sen or 8.32% to RM5.51.

Elsewhere in Asia, equity markets mostly kicked off the new year on an upbeat note. Reuters reported that Chinese shares extended their rally after a survey pointing to a continued recovery in the world’s second-largest economy bolstered investor sentiment.

The Shanghai Composite Index rose 0.86% to 3,502.96, Shenzhen Component Index gained 2.47% to 14,827.47, and Hong Kong’s Hang Seng index advanced 0.89% to 27,472.81.

Tokyo’s Nikkei 225, however, fell 0.68% to 27,258.38 after the government said it may call a state of emergency over surging coronavirus cases.

Asian forex continued to gain momentum on the first trading day of 2021. The ringgit rose 0.31% to 4.0080 against the US dollar as at 5pm, the strongest level since June 2018.

“The ringgit is seen to strengthen further in the first week of 2021 as the [US] dollar is expected to extend its broad-based weakness on the back of positive global economic sentiment, strong crude oil prices and the global Covid-19 vaccination roll-out,” said Kenanga Research in a note today.

S Kanagaraju