KUALA LUMPUR (May 14): The FBM KLCI reversed its earlier gains and dropped below the 1,400 level at mid-morning today while market breadth turned negative as global economic risks and extent of the Covid-19 epidemic took centre stage again.

At 10am, the FBM KLCI lost 8.24 points to 1,388.89. The index had earlier risen to a high of 1,411.08.

Losers led gainers by 532 to 173, while 291 counters traded unchanged. Trading volume was 2.07 billion shares valued at RM1.13 billion.

The top losers included Dutch Lady Milk Industries Bhd, Nestle (M) Bhd, Ajinomoto (M) Bhd, PPB Group Bhd, Heineken Malaysia Bhd, Panasonic Manufacturing Malaysia Bhd, British American Tobacco (M) Bhd, Aeon Credit Service (M) Bhd, Rubberex Corp Bhd and Malaysia Airports Holdings Bhd.

The actives included Minetech Resources Bhd, Green Packet Bhd, Key Alliance Group Bhd, XOX Bhd, QES Group Bhd, Notion VTec Bhd, Careplus Group Bhd and JAG Bhd.

The gainers included Top Glove Corp Bhd, Favelle Favco Bhd, Hartalega Holdings Bhd, United Plantations Bhd, Supermax Corp Bhd, IHH Healthcare Bhd and Petronas Gas Bhd.

Bloomberg said Asian stocks retreated after US Federal Reserve Chair Jerome Powell warned about economic risks and big-name investors fueled doubts about valuations.

Treasuries held gains, it said.

Hong Leong IB Research said tracking the recent three-day 1,083-point pullback on the Dow, local sentiment is likely to remain cautious.

Following a 15.6% relief rally from the 1,208 trough on March 19, the KLCI could experience some degree of profit-taking (with key supports at 1,350-1,370), ahead of the ongoing reporting season, worries of US-China conflict and second wave of coronavirus infections coupled with Powell’s bearish view on US economic outlook, which is “both highly uncertain and subject to significant downside risks”, the research house said.

“On local stocks, we believe that yesterday’s up move has sent the glove makers into their respective extremely overbought levels and rich valuations, and hence a profit-taking pullback may just be around the corner,” it said.