KLCI declines 1.24% as Turkish lira rout spooks investors

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KUALA LUMPUR (Aug 13): The FBM KLCI declined 22.41 points or 1.24% as Malaysian shares tracked Asia's share selldown on uncertainty sparked by the depreciation of the Turkish lira. At 5pm, the KLCI closed at 1,783.34 points after falling to its intraday low at 1,782.70 points.

Reuters reported that Asian share markets skidded and the euro hit one-year lows on Monday as a renewed rout in the Turkish lira drove demand for safe harbours, including the US dollar, Swiss franc and yen. It was reported that the lira depreciated  largely over worries about Turkey President Tayyip Erdogan's influence over the economy, his repeated calls for lower interest rates in the face of high inflation and worsening ties with the United States.

It was reported that the lira found some support after sinking to a record low below 7 lira per dollar and was last traded at 6.8364 against the dollar.

In Malaysia, Kenneth Leong, senior research analyst at Malacca Securities Sdn Bhd, told theedgemarkets.com: “There was a broad-based selldown on the KLCI in tandem with weakness across regional markets, and this is likely to prolong over the near-term.”

At 5pm, Malaysia Airports Holdings Bhd and IHH Healthcare Bhd were the biggest decliners, in percentage terms, among the 30 KLCI component stocks. According to Malaysia Airports and IHH's websites, both groups have operations in Turkey.

Malaysia Airports together with its consortium partners Limak Group and GMR Infrastructure Ltd operate the Istanbul Sabiha Gokcen International Airport while IHH owns 60% of the Turkey-based Acibadem integrated healthcare chain, the websites indicated.

At Bursa Malaysia, Malaysia Airports shares fell 53 sen or 5.38% to close at RM9.33 while IHH dropped 30 sen or 5.22% to RM5.45. IHH was also the most-active stock across Bursa Malaysia with some 59 million shares traded.

Asian share markets fell. Japan’s Nikkei 225 closed down 1.98% while South Korea's Kospi declined 1.5%.

In China, Hong Kong’s Hang Seng fell 1.52% while the Shanghai Stock Exchange Composite lost 0.34%.