KUALA LUMPUR (Jan 2): The FBM KLCI fell 1.08% at the midday break on the first trading day of 2019, following data showing that manufacturing activity in Malaysia in December suffered the sharpest deterioration in manufacturing business conditions since the survey began six-and-a-half years ago.

The Nikkei Malaysia Manufacturing Purchasing Managers' Index (PMI) fell to 46.8, from 48.2 in November.

Sentiment was further dampened by poor economic data from China, which dragged regional markets.

At 12.30pm, the FBM KLCI lost 18.24 points to 1,672.34.

Losers led gainers by 440 to 213, while 259 counters traded unchanged. Volume was 1.07 billion shares valued at RM423.09 million.

The top losers included Dutch Lady Milk Industries Bhd, Petronas Dagangan Bhd, Petronas Gas Bhd, Kuala Lumpur Kepong Bhd, PPB Group Bhd, Batu Kawan Bhd, MISC Bhd, AMMB Holdings Bhd, Tenaga Nasional Bhd, Axiata Group Bhd and Malayan Banking Bhd.

The actives included Sapura Energy Bhd, Sumatec Resources Bhd, Datasonic Group Bhd, My EG Services Bhd, Prestariang Bhd, PUC Bhd, Hubline Bhd and Permaju Industries Bhd.

The gainers included Nestle (M) Bhd, Panasonic Manufacturing Malaysia Bhd, GHL Systems Bhd, United Plantations Bhd, Aeon Credit Service (M) Bhd and Malaysia-listed Hang Seng Index-linked put warrants.

Malaysian and Singaporean shares sank on Wednesday after disappointing economic data from China, while a rally in real estate stocks drove Philippine and Vietnamese equities higher, according to Reuters.

Other Asian markets also fell after a private survey showed that China's factory activity had contracted for the first time in 19 months in December as domestic and export orders continued to weaken, it said.

Hong Leong IB Research said in the US, the Dow could rebound after severe selling activities throughout the month of December, but trading activities will be focusing on the corporate earnings season that will be starting on Jan 14, which could provide direction for the markets.

"In the meantime, we expect the volatility may persist during the 90-day trade truce period as markets are still headlines driven at this moment.

"We believe the pullback on the FBM KLCI may persist over the immediate term, but based on the technical readings on the MACD (moving average convergence divergence) indicator, which suggested a bullish divergence could mean that the key index having limited downside risk, potentially leading to a 'January effect' bounce.

"The support will be pegged around 1,630-1,650," it said.