KLCI extends loss for eighth day on tepid sentiment as virus fatalities rise

KLCI extends loss for eighth day on tepid sentiment as virus fatalities rise
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KUALA LUMPUR (Jan 30): The FBM KLCI extended its losing streak for the eighth day running as sentiment remained tepid, against the backdrop of increasing fatalities from the coronavirus infections in China, as well as ahead of the February earnings season.

At 10am, the FBM KLCI was down 4.74 points to 1,545.73. The index had earlier slipped to a low of 1,540.71.

Losers led gainers by 329 to 198, while 279 counters traded unchanged. Volume was 631.57 million shares valued at RM343.29 million.

The top losers included KESM Industries Bhd, Nestle (M) Bhd, Heineken Malaysia Bhd, Kuala Lumpur Kepong Bhd, United Plantations Bhd, Petronas Gas Bhd, Latitude Tree Holdings Bhd and Petronas Chemicals Group Bhd.

The actives included Icon Offshore Bhd, RGB International Bhd, Avillion Bhd, ES Ceramics Technologies Bhd, Oceancash Pacific Bhd and Ucrest Bhd.

The gainers included Panasonic Manufacturing Malaysia Bhd, Dutch Lady Milk Industries Bhd, British American Tobacco (M) Bhd, Carlsberg Brewery Malaysia Bhd, Sarawak Consolidated Industries Bhd, Hengyuan Refining Company Bhd, Hong Leong Financial Group Bhd, Kejuruteraaan Asastera Bhd and Genetec Technologies Bhd.

Reuters said Asian stocks slipped while gold and bonds were in demand on Thursday as worries about the spread of a new virus from China sent investors heading for safety.

The Federal Reserve kept interest rates unchanged on Wednesday, as expected, although bank Chairman Jerome Powell's comments about a low inflation outlook added to U.S. government bonds' appeal, it said.

Hong Leong IB Research said in the short term, the Dow is expected to remain in choppy as investors are closely monitoring the coronavirus outbreak (which could grow into a global pandemic).

Nevertheless, it said downside risks are likely to be well-cushioned by the Fed’s positive US economic outlook and accommodative monetary policy coupled with the strong 4Q19 results (as for the 141 S&P 500 members that have reported Q4 results 70% beating EPS estimates and 69% beating revenue estimates).

“Crucial supports are situated at 28000-28400 whilst resistances are at 29000-29400 levels,” it said.

On the outlook for the KLCI, it said pending to refill the 1,558-1,568 gap (Jan 28), KLCI is likely to trend sideways amid growing concerns over the economic fallout from the deadly coronavirus outbreak in China and ahead of the Feb reporting season.

“For oversold rebound, Genting Malaysia Bhd (Buy -TP RM3.64) could see potential upside towards RM3.14/3.21/3.30 following the Doji pattern on 28 Jan whilst supports are found at RM3.00/2.90.

“Similarly, Genting Bhd (Buy -RM6.73) should attract investors to accumulate for upside targets at RM5.77/5.85/6.03. Crucial supports are capped at RM5.52/5.36/5.27,” it said.