KLCI extends loss on weak manufacturing data, Trump tariff overtures

KLCI extends loss on weak manufacturing data, Trump tariff overtures
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KUALA LUMPUR (May 4): The FBM KLCI extended its loss at mid-morning Monday and fell 2.11% as weak domestic April manufacturing data coupled with trade tariff overtures by US President Donald Trump against China dragged global markets.

The Malaysian manufacturing sector came under heavy pressure during April as measures implemented to tackle the spread of Covid-19 caused firms to either suspend production or operate well below full capacity.

The headline IHS Markit Malaysia Manufacturing Purchasing Managers’ Index (PMI) slumped to 31.3 in April from 48.4 in March.

At 10am, the FBM KLCI lost 2.11% or 20.76 points to 1,378.02.

The top losers included Dutch Lady Milk Industries Bhd, Nestle (M) Bhd, Public Bank Bhd, Heineken Malaysia Bhd, Carlsberg Brewery Malaysia Bhd, Petronas Gas Bhd, Kuala Lumpur Kepong Bhd, PPB Group Bhd and MISC Bhd.

The actives included Lambo Group Bhd, Careplus Group Bhd, Sapura Energy Bhd, Key Alliance Group Bhd, Comfort Gloves Bhd, Hubline Bhd and Green Packet Bhd.

The gainers included Malaysia-listed Hang Seng Index-linked put warrants, Hexza Corp Bhd and Tasek Corp Bhd.

Reuters said the US dollar rose, oil fell and stock markets were poised to slip on Monday as rising US-China tensions over the coronavirus — and growing unease at the gulf between asset prices and grim economic reality — turned investors cautious.

In thin trade, with China and Japan on holiday, US stock futures fell 1.6%, US crude tumbled over US$1 a barrel, or 6%, and futures for Australia's benchmark ASX 200 Index pointed to a negative open, it said.

Hong Leong IB Research said tracking a two-day 910-point rout on Dow, Bursa Malaysia is likely to experience a choppy session this week in anticipation of a poor upcoming May reporting season and renewed US-China trade tensions coupled with the concern of a new wave of infections over the premature move to ease movement control order.

“Nevertheless, the downside risk may be cushioned by expectations of another OPR cut on May 5 and a positive technical breakout above 50D SMA last Thursday.

“Meanwhile, aviation stocks could witness some selling pressures after Berkshire disposed of its [entire] positions in the US airline industry due to Covid-19,” it said.