KUALA LUMPUR (July 3): The FBM KLCI drifted lower in early trade this morning, tracking regional markets, dragged by select blue chips.
At 9.05am, the FBM KLCI dipped 2.15 points to 1,688.85.
The decliners included British American Tobacco (M) Bhd, Hong Leong Bank Bhd, Malaysia Airports Holdings Bhd, Tenaga Nasional Bhd, Petronas Chemicals Group Bhd, MISC Bhd, Magnum Bhd, Sarawak Cable Bhd, Public Bank Bhd and Hibiscus Petroleum Bhd.
Stocks in Asia looked set for modest declines as haven assets from Treasuries to gold resumed rallies amid doubts over the pace of Federal Reserve rate cuts and warnings about global growth, according to Bloomberg.
Futures dipped in Japan and Australia, and were flat in Hong Kong. The S&P 500 swung between gains and losses before rising into the close for a second straight all-time high. The 10-year Treasury yield slumped to 1.97% and gold rose back above $1,400 an ounce. Demand for riskier assets ebbed after a Federal Reserve official said she’s not ready to support a rate cut and news broke that House Democrats are stepping up their investigation into the president’s taxes. Oil plunged more than 4% in New York, it said.
CIMB Research said despite Trump’s fresh threats of tariffs on $4 billion of European goods, the FBM KLCI continued to increase by another 7.38 points to close at 1,691 on Tuesday.
The research house said the index is likely to trade higher, adding that to fill the March 1 gap of 1,701-1,707 in the days ahead after it decisively closed above the 200-day EMA yesterday.
“Given that there is no negative divergence formation on the indicators after the index took out the long-term downtrend from all-time high of 1,896 on June 20, the index is likely to continue to work its way higher.
“The series of higher highs and higher lows formation from the low of 1,572 is another positive.
“Nevertheless, if there is another unexpected Trump tweet-attack on the market during the month, a reversal to the downside will not surprise us. Resistance: 1,700 & 1,707. Support: 1,682 & 1,671,” it said.