KUALA LUMPUR (Jan 22): The FBM KLCI continued its downward trend since Monday, closing down 9.35 points or 0.59% at 1,577.98 points today, largely due to banking stocks being hit as a result of the overnight policy rate (OPR) cut.

"The banking stocks are the ones bringing the KLCI down today. Other than that, the local stock market is doing pretty well today," Rakuten Trade Sdn Bhd research vice president Vincent Lau told theedgemarkets.com.

The banking stock components of the KLCI that were impacted by the announcement include Hong Leong Bank Bhd (-3.56%), Public Bank Bhd (-2.36%), CIMB Group Holdings Bhd (-1.95%), Malayan Banking Bhd (-0.58%), and AMMB Holdings Bhd (0.52%).

These stocks noticeably took a dip after Bank Negara Malaysia announced at around 3pm that the OPR has been reduced by 25 basis points to 2.75%.

Only RHB Bank Bhd was neutral to the announcement as it closed unchanged.

Across Bursa Malaysia, a total of 3.07 billion shares worth RM2.57 billion were traded.

Top gainers included consumer stocks Carlsberg Brewery Malaysia Bhd and Fraser & Neave Holdings Bhd while leading decliners included Dutch Lady Milk Industries Bhd and Panasonic Manufacturing Malaysia Bhd.

In other markets, a global outbreak of a pneumonia-causing virus, which started in China, dictated world market sentiment.

Reuters reported that China's response to the virus outbreak tempered fears of a global pandemic, although Shanghai shares slipped amid worries about a hit to domestic demand and tourism.

"Fears of contagion, particularly as millions travel for Lunar New Year festivities, [have] pushed stocks from record peaks," the newswire said.