KLCI drops on renewed trade worries

KLCI drops on renewed trade worries
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KUALA LUMPUR (Dec 16): Malaysian stocks closed lower today, ending a three-day streak of gains, on renewed worries about the phase one trade deal between the US and China.

At 5pm, the FBM KLCI closed 1.81 points or 0.12% lower at 1,569.35. The market has been trading in the range of 1,565.59 to 1,573.41.

Malacca Securities Sdn Bhd senior analyst Kenneth Leong said the KLCI started the week off on a weak note after lingering mostly in the negative territory for the entire trading session today amid fresh worries surrounding the phase one trade deal.

"The decline today was also partially due to the persistent selling from foreign funds, which marks the sixth consecutive week," Leong told theedgemarkets.com, adding that this could be due to the weaker ringgit.

He added that there were also "mild signs of profit-taking" activities.

Among the 30 component stocks of the KLCI, the top three laggards were Hartalega Holdings Bhd, Dialog Group Bhd and Malaysia Airports Holdings Bhd (MAHB).

Hartalega closed eight sen or 1.54% lower at RM5.10 today, while Dialog fell four sen or 1.16% to close at RM3.40 and MAHB closed seven sen or 0.93% lower at RM7.48.

Trading volume fell to 2.29 billion shares worth RM1.77 billion compared with Friday's 2.94 billion shares worth RM2.51 billion. Losers led gainers by 453 to 376, while 404 counters remained unchanged.

Across Asia, Japan's Nikkei 225 dropped 0.29%, South Korea's Kospi fell 0.1% while Hong Kong's Hang Seng was down 0.65%.

Reuters reported that Asian shares moved higher on Monday as investors welcomed a trade agreement between Beijing and Washington over the weekend, but enthusiasm was capped by lingering scepticism about the deal and ongoing relations between China and the US.

US Trade Representative Robert Lighthizer on Sunday (Dec 15) said a deal was "totally done", notwithstanding some needed revisions, and would nearly double US exports to China over the next two years, said the newswire.

The phase one agreement suspended a threatened round of US tariffs on a US$160 billion list of Chinese imports that was scheduled to take effect on Sunday, said Reuters, adding that the US also agreed to halve the tariff rate, to 7.5%, on US$120 billion worth of Chinese goods.

China will purchase the US goods in exchange for the delay of US tariffs on Chinese goods originally scheduled to take effect on Dec 15 and the reduction of some existing tariffs, but officials in Beijing have been vague about the size of these purchases, the report added.