KLCI extends losses on China, Greece concerns

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KUALA LUMPUR (July 8): The FBM KLCI lost 16.47 points or 0.96% to finish at 1,695.83 on concerns over China's share slump, Greece's debt crisis and Malaysia's political uncertainties.

At 5pm, the KLCI fell on losses in stocks AMMB Holdings Bhd and Malayan Banking Bhd. Malaysian shares fell as investigation on 1Malaysia Development Bhd (1MDB) is in progress, amid allegations some US$700 million (RM2.67 billion) was deposited into Prime Minister Datuk Seri Najib Tun Razak's bank accounts.

Malaysian equities had tracked Asian shares losses. In China, Hong Kong's Hang Seng fell 5.84%, while the Shanghai Composite dropped 5.9% South Korea’s Kospi was down 1.18%, while Japan’s Nikkei 225 declined 3.14%.

In Malaysia, JF Apex Securities research head Lee Chung Cheng said, “The market fell today, due to poor market sentiment amid lingering concern on Greece's debt crisis and China's share slump"

“There is political uncertainty (in Malaysia), besides external factors — Grexit, US rate hike and the slowdown of China's economy,” Lee told theedgemarkets.com

Yesterday, the KLCI fell 4.75 points to close at 1,712.3.

Today, Reuters reported Asian shares tumbled to a 1 1/2-year low and the safe-haven yen rallied as Chinese stocks struggled to pull out of a tailspin, shaking investors already rattled by Greece's debt crisis.

Reuters reported investors feared the impact of the Greek crisis, as they worried failure to reach a deal with Greece's lenders could cause wider disruption across other southern European nations.

In China, stocks tumbled to four-month lows on Wednesday, as panicky investors dumped shares across the board, even as the government tried to unveil supportive measures throughout the day session to stop the plunge.

Bursa Malaysia saw two billion shares, worth RM2.26 billion, transacted. There were 828 decliners versus 117 gainers.

China stock index-linked put warrants dominated Bursa Malaysia’s top gainers list, amid a broader market decline, as investors eyed Greece's debt crisis and China market plunge.

Hong Kong's Hang Seng put warrant HSI-HC hit limit up, after rising 30 sen or 136% to close at its intraday high of 52 sen. The top gainer on Bursa Malaysia saw some two million warrants having changed hands.

Put warrants linked to Mainland China indices also rose. The list included CHINA50-H1, which increased 27.5 sen or 138% to 47.5 sen, with some 77 million units traded. CHINA50-H1, which was the second most-active entity on Bursa Malaysia, was also the 10th-largest gainer.

Investors tend to capitalise on put warrants when the broad market turns bearish, as the warrants allow them to hedge against the broad market performance.

Bursa Malaysia's top decliners included AMMB and Petronas Gas Bhd, while Air Asia Bhd was the top-active stock for the day.