KLCI falls 0.6%, tracking regional and oil losses

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KUALA LUMPUR (April 18): The FBM KLCI fell 10.31 points or 0.6%, tracking losses in most Asian markets as oil prices tumbled after a weekend meeting in Doha failed to come up with an agreement to freeze output and address a supply glut.

The ringgit fell the most in two weeks to 3.9265 against the US dollar today.

At 5pm the benchmark KLCI closed at 1,717.68 points, led by losses in stocks like SapuraKencana Petroleum Bhd, CIMB Group Holdings Bhd and KLCC Stapled Group.

CIMB dipped as much as 5.03% to RM4.72 today after the banking group said it will conduct an independent review on the transfer of US$7 million cash by its chairman Datuk Seri Nazir Razak to Barisan Nasional politicians.

The counter later pared losses to close 17 sen or 3.42% lower at RM4.80. It was the top sixth loser on the local bourse, and was actively-traded with some 23.92 million shares changing hands.

Across Asia, Japan's Nikkei 225 dropped 3.4%, Hong Kong's Hang Seng fell 0.73% and South Korea's Kospi dipped 0.28%.

Reuters reported tumbling crude oil futures knocked Asian shares on Monday after producers' talks failed to agree on a plan to curb the global supply glut. Tokyo stocks skidded as investors assessed the impact of a devastating earthquake in south-western Japan.

Some 18 oil exporting nations, including Organization of the Petroleum Exporting Countries (OPEC) members, had gathered in Doha over the weekend in an attempt to agree to stabilise output at January levels until October 2016. The pact fell apart after Saudi Arabia demanded that Iran join in.

Brent crude fell 2.16% to US$42.17 per barrel at the time of writing.

Areca Capital Sdn Bhd chief executive officer Danny Wong told theedgemarkets.com that the negative reaction is seen as a knee-jerk reaction towards the outcome of the meeting in Doha.

"I think this is something short term. There is also no massive foreign outflow," he said via telephone.

He said oil consumption is also expected to recover and oil price is expected to rebound to US$50 per barrel by end of the year.

On the local front, Wong said the election in Sarawak and the corporate earnings announcement by the end of April will be closely watched.

Across Bursa Malaysia, 1.73 billion shares valued at RM1.69 billion were traded. Decliners outnumbered gainers at 558 against 251.

Ajinomoto (M) Bhd was the top gainer, while the leading decliner was British American Tobacco (M) Bhd.

AirAsia X Bhd's warrants were the most actively-traded on the exchange.