KLCI down 0.6% as Covid-19 jitters rattle global markets

KLCI down 0.6% as Covid-19 jitters rattle global markets
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KUALA LUMPUR (March 6): The FBM KLCI fell 0.6% at mid-morning today in line with the regional decline and was firmly tethered below the 1,500-point level as jitters from the impact of the coronavirus rattled global markets.

At 10am, the FBM KLCI was down 9.52 points to 1,481.51.

Losers led gainers by 367 to 184, while 249 counters traded unchanged. Volume was 683.57 million shares valued at RM344.03 million.

The top losers included Fraser & Neave Holdings Bhd, Nestle (M) Bhd, PPB Group Bhd, Hong Leong Financial Group Bhd, Time Dotcom Bhd, KESM Industries Bhd, Carlsberg Brewery Malaysia Bhd, Public Bank Bhd and Hong Leong Bank Bhd.

The actives included Vortex Consolidated Bhd, Sapura Energy Bhd, Careplus Group Bhd, TH Heavy Engineering Bhd, Supermax Corp Bhd and Yong Tai Bhd.

The gainers included Heineken Malaysia Bhd, UWC Bhd, Daibochi Bhd, Kuala Lumpur Kepong Bhd and Top Glove Corp Bhd.

Reuters said Asian shares fell on Friday following another Wall Street rout as disruptions to global business from the coronavirus beyond China worsened, stoking fears of a prolonged world economic slowdown.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.5%. Australian shares fell 1.86%, while Japan's Nikkei stock index slid 1.45%, it said.

Hong Leong IB Research said investors are likely to witness an extended wild swings consolidation on Dow (24,500-27,200 levels) in the near term as the Covid-19 outbreak has the potential to become a pandemic and is at a decisive stage, significantly affecting global trades and travels as well as US corporate earnings and economic growth in the mid to long term.

“Nevertheless, the pre-emptive 0.5% rate cut by Fed and a US$8 billion emergency fund being passed by the lawmakers to combat Covid-19 outbreak in the US are likely to cushion further sharp correction, barring further coronavirus outbreak in US.

“Given the bearish Dow’s outlook, we expect KLCI to lock in near-term consolidation (range bound within 1,456-1,517) amid domestic political turmoil and pending the new cabinet line-up.

“Also, the Covid-19 fears due to a spike in new cases in Malaysia has overshadowed the RM20 billion economic stimulus package and year-to-date 0.5% OPR reductions (-0.25% each on Jan 22 and Mar 3) meant to cushion the adverse impact from Covid-19.

“The elevated risks and uncertainty mean that, in the near term, the priority for equity investors should be the preservation of capital, with core holdings in defensive and resilient high-yield stocks,” it said.