KLCI dips as investors weigh ramifications of MCO extension

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KUALA LUMPUR (April 24): The FBM KLCI tracked the regional dip in early trade Friday and drifted lower as domestic investors weighed the ramifications of the Movement Control Order extension until May 12.

At 9.05am, the FBM KLCI fell 6.68 points to 1,374.96.

The early decliners included Nestle (M) Bhd, Petronas Dagangan Bhd, Allianz Malaysia Bhd, Carlsberg Brewery Malaysia Bhd, Tenaga Nasional Bhd, Aeon Credit Service (M) Bhd, Syarikat Takaful Malaysia Keluarga Bhd, Amway Holdings (M) Bhd, Mega First Corp Bhd and QL Resources Bhd.

Bloomberg said Asian stocks slipped Friday as investors weighed signs of progress in the fight against the coronavirus against data showing the severity of the impact on economies. Oil climbed back above $17 a barrel.

Japanese shares dipped along with those in Korea, while Australian equities fluctuated. S&P 500 contracts edged lower after the gauge erased a 1.6% gain in Thursday’s session to end little changed. Gilead Sciences Inc.’s antiviral drug remdesivir flopped in its first randomized clinical trial, the Financial Times reported, citing draft documents published accidentally by the World Health Organization. The drug company disputed that characterization. Treasuries held overnight gains and the dollar was little changed, it said.

Hong Leong IB Research said tracking positive bounce from the oversold crude oil prices and continuous drop in local active Covid-19 cases to 1966 (lowest since 27 Mar), KLCI may resume its upward momentum to retest the key SMA50 (1398) resistance.

“Breaking this hurdle would lift the index from sideways consolidation mode towards 1412-1429 territories.

“Nevertheless, the 3rd MCO extension (although widely anticipated) to 12 May could pose negative ramifications on the economy and corporate earnings in 2020, capping further meaningful recovery.

“Today, we believe trading interest will be seen within O&G stocks amid gains in crude oil prices, whilst technology stocks could witness continuous profit taking following a weak guidance by Intel,” it said.

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