KUALA LUMPUR (July 28): The FBM KLCI fell 10.06 points or 0.6% to its intraday low, following news of a Cabinet reshuffle by Prime Minister Datuk Seri Najib Razak.
At 5pm, the KLCI settled at 1,699.70 points on losses in stocks like Kuala Lumpur Kepong Bhd and MISC Bhd. Both stocks ended among Bursa Malaysia's top decliners.
The KLCI had earlier risen to intraday high of 1,713.06. Etiqa Insurance & Takaful head of research Chris Eng said the KLCI had tracked regional market gains at late morning, but subsequently fell after the announcement of the Cabinet reshuffle.
“The weakening of the market after the announcement of the Cabinet reshuffle may be due to uncertainties at the moment, as to whether political uncertainty will subside. If indeed they subside, then we see a gradual recovery in the KLCI, before a rebound in the fourth quarter.
“If however, a challenge on the cabinet reshuffle is raised by certain quarters, then the KLCI could see further weakness towards the 1,680 point level,” Eng told theedgemarkets.com.
From a technical viewpoint, Jupiter Securities Sdn Bhd technical analyst Nazarry Rosli said although today's KLCI decline was not very significant, the development would have an impact on investor sentiment.
"Although the fall is not very significant today, the Cabinet reshuffle has definitely affected investor sentiment, as it casts some uncertainty over Malaysia's political environment," Nazarry said.
Across the board, the exchange saw 2.14 billion shares, worth RM2.25 billion, traded. There were 726 decliners versus 197 gainers, while 251 counters were unchanged.
Karex Bhd headed gainers, while the top-active stock was newly-listed Sunway Construction Group Bhd.
Among decliners, MISC fell 27 sen or 3.5 sen to close at its intraday low of RM7.55, after 66.5%-owned subsidiary Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) reported a 55% drop in second quarter net profit, from a year earlier.
MHB's profit drop came on lower income from its oil and gas structure construction unit.
MHB said net profit fell to RM18.03 million in the second quarter ended June 30, 2015, from RM39.73 million. Revenue was lower at RM582.14 million, versus RM980.92 million.
Across Asia, Japan’s Nikkei 225 fell 0.1%, while Hong Kong’s Hang Seng and South Korea's Kospi gained 0.62% and 0.01% respectively.
Reuters reported Asian stocks rose from the day's lows on Tuesday, as Chinese shares see-sawed after Beijing scrambled to prop them up, while some investors took shelter from market volatility in safe-haven assets such as government bonds and the Japanese yen.
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