KLCI erases losses, ringgit gains as crude oil exceeds US$50

KLCI erases losses, ringgit gains as crude oil exceeds US$50
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KUALA LUMPUR (May 26): The FBM KLCI rose 0.13 point to close at 1,631.09 after volatile trade as investors took the cue from higher oil prices and near-term potential US interest rate hikes.

Crude oil, which surpassed US$50 a barrel, led to a stronger ringgit against the US dollar as the commodity forms a crucial portion of the Malaysian economy. The ringgit appreciated to 4.0765 against the US dollar at 5pm.

But investors also evaluated the impact of potential US interest rate hikes, which could prompt investors to shift their funds back to US dollar assets from emerging Asian markets.

Crude oil and US rate hike sentiment might have led the KLCI to vacillate between gains and losses today within an intraday range of 1,628.19 to 1,638.17 points.

JF Apex Securities Bhd senior analyst Lee Cherng Wee said the KLCI had seen "flattish" trades since last week.

"When regional markets were up last week, the KLCI was still showing flattish growth, and this is still apparent today despite the improvement in crude oil prices," Lee told theedgemarkets.com.

Bursa Malaysia saw 1.47 billion shares valued at RM1.48 billion traded. There were 315 gainers against 475 decliners.

Top gainer was Batu Kawan Bhd while leading decliners included British American Tobacco (M) Bhd and AMMB Holdings Bhd. Eka Noodles Bhd was the most-active counter.

Across regional share markets, Hong Kong's Hang Seng rose 0.14%, Japan's Nikkei 225 was up 0.09% while South Korea's Kospi fell 0.18%.

Reuters reported although Brent crude oil rose above US$50 a barrel for the first time in nearly seven months on Thursday, Asian shares struggled to gain traction, with worries about US interest rates and China's slowing economy keeping investors on the sidelines.