KLCI drifts to three-month low amid unexciting economic outlook

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KUALA LUMPUR (March 28): The FBM KLCI was hovering in a tight range for most of the trading day amidst absence of buying impetus. The unexciting economic outlook did not help too.

The benchmark index fell 1.4 points to slip to a three-month low today to close at 1,641.33 points — a level not seen since Dec 19 2018 — after ranging between 1,638.69 points and 1,645.21 points.

Among the 30 KLCI stocks, worst hit in percentage terms was Maxis Bhd, Sime Darby Plantations Bhd and Sime Darby Bhd.

Bank Negara Malaysia’s (BNM) GDP growth forecast of 4.3% and 4.8% for 2019 compared with 4.9% earlier reinforced the expectation of an economic slowdown.  

TA Securities technical analyst Steven Soo told theedgemarkets.com that given the concerns on slowing domestic economic growth, he does not foresee local sentiment to improve in the immediate term. He expects the Malaysian market to trade with a bias to the downside.

Soo noted the current resistant level is pegged at 1,673 points compared with 1,677 points previously, while the support level remained unchanged at 1,626 points.

From his reading of the chart, Soo expects the benchmark index to retest the current support level of 1,626 next week.

Across the local market, Bursa Malaysia saw 1.94 billion shares worth RM1.66 billion traded with 326 gainers versus 405 losers, while 435 counters remained unchanged.

Notable gainers included Nestle (M) Bhd, British American Tobacco (M) Bhd and Heineken Malaysia Bhd. Losers included Carlsberg Brewery Malaysia Bhd, Apex Healthcare Bhd and Lotte Chemical Titan Holding Bhd.

Sapura Energy Bhd was the most actively traded counter today with 104.17 million shares traded. It closed at 33.5 sen, up 0.5 sen.

Reuters reported that global bond yields continued to spiral lower in Asia on Thursday as recession fears have fed the expectations of more policy easing by major central banks, though some share markets in the region did manage to steady after an early sell-off.

In Asia, the losses were led by Japan’s Nikkei 225 which fell 1.61% today along with South Korean Kospi which declined 0.82%. China's Shanghai Stock Exchange Composite slid 0.92% while the Hong Kong Hang Seng Index gained 0.16%.