KUALA LUMPUR (Jan 5): The main index of Bursa Malaysia dipped below the crucial 1,600-point level in the mid-morning today as market breadth turned tepid in line with lower regional markets.
At 10am, the FBM KLCI was 5.74 points lower at 1,596.82.
Market breadth turned negative with 547 losers and 282 gainers, while 395 counters traded unchanged. Trading volume was 1.71 billion shares valued at RM937.74 million.
The top losers included Nestle (Malaysia) Bhd, Fraser & Neave Holdings Bhd (F&N), Malaysian Pacific Industries Bhd, Hong Leong Bank Bhd (HLB), Kuala Lumpur Kepong Bhd (KLK), Petronas Gas Bhd, MISC Bhd, Petronas Chemicals Group Bhd (PetChem), and Carlsberg Brewery Malaysia Bhd.
The actively traded stocks included Yong Tai Bhd, DGB Asia Bhd, Inix Technologies Holdings Bhd, Iris Corp Bhd and AT Systematization Bhd.
The gainers included Toyo Ventures Holdings Bhd, Greatech Technology Bhd, Supermax Corp Bhd, Top Glove Corp Bhd and IGB Bhd.
Reuters said Asian shares edged lower today amid uncertainty about Senate run-offs in Georgia, which could have a big impact on incoming US President Joe Biden's economic policies.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.12%, pulling back from a record high hit in the previous session. Australian stocks fell 0.16%, it said.
Inter-Pacific Research Sdn Bhd said the KLCI succumbed to fresh selling pressure at the start of the new year with glove stocks dropping the most in some two months upon the resumption of regulated short-selling activities.
It said the selldown also left their stock prices at the lowest levels in six months with their weakness also spreading to the broader market, resulting in market breadth turning overwhelmingly negative even as the lower liners were mostly range-bound.
Meanwhile, it said traded volume increased as more market players returned.
“Yesterday’s selling was a surprise as glove stocks had already been consolidated and surrendered most of their 2020 massive gains in December.
“As a result, the key index is tethering at 1,600 points and is on the brink of surrendering all of its 2020 gains. The KLCI is also looking increasingly frail as we think sentiments on glove makers could remain depressed for longer in view of the vaccine availability that may bring about oversupply risk.
“Even if there is a rebound among glove stocks following their recent steep falls, we think that it may be modest for the time being as sentiments on these stocks remain mostly indifferent.
“Consequently, we think that there remains substantial downside risk to the market that is further compounded by heightened domestic political uncertainties.
“This leaves the 1,600-point support [level] under threat and if it gives way, the next support is at the 1,590 level. Meanwhile, the near-term resistance [levels] are at 1,612 and 1,620 points respectively,” it said.