KLCI erases losses on late buying; Ringgit weakens

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KUALA LUMPUR (July 3): The FBM KLCI gained 0.36 point to finish at 1,734.24, as investors bargain hunted for beaten-down shares. This came amid significant losses in China shares and concerns over Greece's debt crisis.

In Malaysia, the KLCI rose on gains in stocks like Petronas Dagangan Bhd and DiGi.Com Bhd. The KLCI had earlier traded at an intraday low of 1,724.50 points.

Analysts said the KLCI had tracked Asian share losses, amid weak sentiment on the ringgit. Jupiter Securities chief market strategist Benny Lee said the "unexciting movement in the KLCI today can be correlated to the weak ringgit."

“Another factor is the weak markets regionally. The Shanghai market for instance, fell by 6% today, therefore the KLCI’s flattish trade today was in line with the downward sentiment regionally,” Lee told theedgemarkets.com.

Elsewhere, Hong Kong's Hang Seng fell 0.83% while South Korea’s Kospi was down 0.14%. Japan’s Nikkei 225 rose 0.08%.

The ringgit weakened to 3.7795 against the US dollar and versus the Singapore dollar, the ringgit depreciated to 2.8026.

Affin Hwang Investment Bank's retail research head Datuk Dr Nazri Khan said investors were mindful of Greece's debt crisis and the timing of US interest hikes.

Higher US interest rates will generate demand for US dollar-denominated assets, hence, a stronger US dollar.
 
“We expect the FBMKLCI index to stage a downside consolidation on Greece volatility, stronger dollar, flat ringgit, a respite in commodity price and a possible hike in Federal Reserve rates. Volatility is expected to remain high due to bond yield movement and Greece Grexit uncertainty, following the referendum over the weekend," Nazri said.

Overall, Bursa Malaysia saw 1.46 billion shares, valued at RM1.39 billion traded. There were 459 decliners and 295 gainers.

Top gainers included British American Tobacco (M) Bhd and Dutch Lady Milk Industries Bhd.

Major decliners included Hong Leong Financial Group Bhd and Pharmaniaga Bhd and Hap Seng Consolidated Bhd.

Actively-traded stocks included Perdana Petroleum Bhd and Jaks Resources Bhd.

The decline in oil and gas-related shares were closely watched on crude oil oversupply concerns. Bumi Armada Bhd fell three sen or 2.5% to close at RM1.15. Perisai Petroleum Teknologi Bhd dropped  0.5 sen or 1% to 44.5 sen.

Reuters reported oil prices dropped as a rising U.S. rig count stoked fears of oversupply. Brent crude futures were down 21 cents at $61.86 per barrel, while U.S. crude futures were $56.66.