KLCI erases gains, falls 0.97% as disappointing domestic data, downbeat US economic outlook drag

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KUALA LUMPUR (June 10): The FBM KLCI erased its earlier gains and fell 0.97% at the midday break today, tracking regional markets as a downbeat economic outlook from the US Federal Reserve (Fed) stoked speculation it would have to add to already historic levels of stimulus to safeguard recovery.

Meanwhile, data from the Department of Statistics Malaysia today showed that Malaysia's Industrial Production Index slumped 32% in April, while the country's wholesale & retail trade plunged to negative 36.6% for the same month.

At 12.30pm, the FBM KLCI lost 15.31 points to 1,559.96. The index had earlier risen to a high of 1,586.22.

Market breadth turned negative with 727 losers and 295 gainers, while 378 counters traded unchanged. Trading volume was a robust 5.56 billion shares valued at RM2.85 billion.

The losers included Nestle (M) Bhd, Petronas Dagangan Bhd, Allianz Malaysia Bhd, Top Glove Corp Bhd, Carlsberg Brewery Malaysia Bhd, Dufu Technology Bhd, Supermax Corp Bhd, British American Tobacco (Malaysia) Bhd and Comfort Gloves Bhd.

The actives included AT Systematization Bhd, Pegasus Heights Bhd, Minetec Resources Bhd, My EG Servi ces Bhd (MyEG) and AirAsia Group Bhd.

The gainers included Time dotCom Bhd, Kuala Lumpur Kepong Bhd, Southern Acids (M) Bhd, Bermaz Auto Bhd and MyEG.

Reuters said Asian shares eased today while bonds rallied after a downbeat economic outlook from the Fed stoked speculation it would have to add to already historic levels of stimulus to safeguard recovery.

Still, stock losses were modest given the scale of their recent rise. MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.3%, a natural pause after 10 straight sessions of gains, it said.

Kenanga IB Research said yesterday Asian stocks mostly closed mixed, as the spotlight shifted to the Fed's first meeting since the economies began to reopen.

It said back home, the FBM KLCI inched up by 0.11 point (+0.01%) to finish at 1,575.27.

"Following the formation of a 'Golden Cross', the index managed to close the gap that was opened during the mid-March market meltdown, which sees it now trading above all of its key-SMAs.

"On the chart, our resistance-turned-support levels are identified at 1,530 (S1) and 1,500 (S2).

"On the upside, our resistance levels stand at 1,600 (R1) and 1,630 (R2)," it said.