KLCI dips 0.84% as sentiment turns bearish

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KUALA LUMPUR (Dec 3): The FBM KLCI fell 0.84% at the midday break on Wednesday, weighed by losses including at index-linked banking stocks and select blue chips.

Sentiment at the local bourse took a beating as Maybank IB Research projected a less than rosy outlook for the banking sector while AllianceDBS Research lowered its 2015 GDP forecast for Malaysia to 5% (from 5.25% earlier).

At 12.30pm, the FBM KLCI fell 15.03 points to 1,771.94. The index had earlier fallen to its intra morning low of 1,768.38.

Market breadth was negative with 487 losers and 194 gainers, while 239 counters traded unchanged. Volume was 676.94 million shares valued at RM751.52 million.

The top losers included British American Tobacco (M) Bhd, Kuala Lumpur Kepong Bhd, Aeon Credit Services (M) Bhd, RHB Capital Bhd, Shangri-La Hotels (Malaya) Bhd, Malayan Banking Bhd, Petronas Chemicals Group Bhd,  Hong Leong Financial Group Bhd and AMMB Holdings Bhd.

IFCA MSC Bhd was the most actively traded counter with 30.14 million shares done.The stock was flat at 78 sen.

The other actives included Minetech Resources Bhd, Sumatec Resources Bhd, KNM Group Bhd, Perisai Petroleum Teknologi Bhd and AirAsia Bhd.

The top gainers included Petronas Dagangan Bhd, Dutch Lady Milk Industries Bhd, Hong Leong Bank Bhd, MMC Corporation Bhd, UMW Holdings Bhd, Carlsberg Brewery (M) Bhd and Freight Management Holdings Bhd.

Regionally, the dollar marked a fresh seven-year high against the yen on Wednesday, which helped lift the Nikkei to a similar record, while oil prices recovered after data showed a drop in U.S. supply, according to Reuters.

MSCI's broadest index of Asia-Pacific shares outside Japan edged slightly down, while Japan's Nikkei stock average was up about 0.8 percent after earlier touching its highest level since July 2007, it said.

Maybank IB Head of Retail Research and chief chartist Lee Cheng Hooi in a note to clients said the FBM KLCI advanced 7.70 points to 1,785.97 yesterday, while the FBMEMAS and FBM100 also closed higher by 60.63 points and 60.92 points, respectively.

Lee said that in terms of market breadth, the gainer-to-loser ratio was 443-to-397 while 312 counters were unchanged, adding that a total of 2.16 billion shares were traded valued at RM2.18 billion.

“We recommend a “Sell on Rallies” stance for the index. The KLCI Dec Futures moved into a small 3.03-point premium against the FBM KLCI.

“We expect weak buying at the supports of 1,763 to 1,783, whilst heavy liquidation would be at the resistances of 1,785 and 1,820.

“The index will be volatile after heavy foreign selling emerged in early Nov at 1,858.09. After a rebound that stalled at 1,845.76 at end Nov, the index plunged to 1,763.55 yesterday.

“Price rebounds remain pyrrhic in nature and still should be sold down as the FBM KLCI may be tracing out a large weekly “Head & Shoulders” pattern,” said Lee.