KUALA LUMPUR (Feb 8): The FBM KLCI dipped 0.35% in early trade this morning, tracking regional markets, weighed by losses at selected index-linked stocks.
At 9.10am, the FBM KLCI fell 5.87 points to 1,687.52.
The decliners included British American Tobacco (M) Bhd, Nestle (M) Bhd, Genting Plantations Bhd, Kuala Lumpur Kepong Bhd, Hong Leong Financial Group Bhd, Axiata Group Bhd. MISC Bhd, Tenaga Nasional Bhd and Malaysia Airports Holdings Bhd.
Asian stocks are set to end the week on a dour note as investors grow anxious that the Trump administration won’t reach a trade deal with China before further tariff hikes kick in. U.S. equities sank with Treasury yields on the news overnight, accordng to Bloomberg.
Shares in Tokyo and Australia declined, with Hong Kong ready to reopen after a three-day holiday, following a retreat in the S&P 500 Index. The post-Christmas rally in risk assets is facing a test after President Donald Trump said he likely won’t meet Chinese President Xi Jinping before the March 1 deadline to avert new U.S. tariffs on Chinese goods. The dollar held gains and the yen ticked higher. The 10-year Treasury yield slipped to 2.66 percent, it said.
Hong Leong IB Research said following overnight 0.9% pullback in Dow, near term Dow upbeat undertone has been interrupted and an extended consolidation is likely to prevail amid uncertainty and sometimes contradictory comments from Washington.
“Moreover, sentiment is likely to be compounded by heightened concerns over slowing global economy and US 2019 earnings outlook as 1Q19 earnings growth estimates have shrunk to below 1% from above 5% at the start of the year.
“Key supports are near 24600-25000 while resistances are set at 25500-25800,” it said.
On the FBM KLCI, the research house said athough the dovish Fed’s monetary stance and improving technical readings could spur KLCI to recapture the 1700-1705 levels in the near term, overnight slide on Dow and an uncertainty of the upcoming Feb reporting season may cap further upside beyond 1705 levels.
“Overall, we expect an extended range bound mode until further clarity from US-China meeting next week,” it said.