KUALA LUMPUR (Feb 3): Malaysian stocks were affected by plummeting oil prices afflicting world markets today, as the benchmark KLCI FBM index lost 19.88 points or 1.2% to close at 1,633.3.
All but seven KLCI constituents closed higher, with the worst hit being UMW Holdings Bhd, Astro Malaysia Holdings Bhd, Hong Leong Bank Bhd, PPB Group Bhd and Petronas Gas Bhd.
At this level, the KLCI is already at a lower level before the revision to Budget 2016 was revealed by Prime Minister Datuk Seri Najib Razak last Thursday, which had excited the market with its plan to maintain the fiscal deficit target at 3.1% with a leaner budget. The local benchmark closed at 1,634.53 points on Jan 28.
Crude oil prices began sliding this week again as hopes for oil-producing nations to reach an agreement for cutting production seem to falter.
While Russia's minister of foreign affairs Sergei Lavrov's statement on extending cooperation with OPEC members to help stabilise oil prices lifted crude last week, The Telegraph reported that world's biggest oil producer Saudi Arabia is still not budging.
Reuters, citing a Morgan Stanley report, said that a rebalancing between oil demand and supply will not come until mid-2017.
JF Apex Securities Bhd senior analyst Lee Cherng Wee said the outlook for Bursa Malaysia remains uncertain.
"Just go for defensive stocks such as consumer, REITs (real estate investment trusts) and some telecommunications stocks that are trading at decent levels after the sell-down last week," he told theedgemarkets.com.
With the US dollar trending higher, shares of rubber glove makers such as Comfort Gloves Bhd and Top Glove Corp Bhd jumped today.
Lee said the KLCI's new support level is around 1,620 points.
On the broader market, 1.49 billion shares worth RM1.8 billion were traded. Market breadth was negative with 325 gainers as compared to 480 losers.
Tiger Synergy Bhd was the most active counter today, followed by Sanichi Technology Bhd, and Metronic Global Bhd.
The bear market also switched investors' interests towards fixed income assets. The two top gainers today were DanaInfra Nasional Bhd retail sukuk DIN040000223 and DIN045801028.
Hong Leong Industries Bhd, meanwhile, emerged as the biggest gainer on Bursa Malaysia, rising 43 sen or 7.65% to close at RM6.05.
Shell Refining Co (Federation of Malaya) Bhd was the biggest decliner, falling by as much as 29.96% to RM3.46 before paring its losses to close at RM3.68. Shell Refining's major shareholder Shell Overseas Holdings Ltd has agreed to sell its 51% stake at a huge discount, for RM1.80 apiece.
Most Asian markets tumbled today as oil prices dropped for a third day. Japan's Nikkei 225 lost 3.15%, Hong Kong's Hang Seng Index fell by 2.36%, China's Shanghai Composite Index lost 0.38%, Australia's S&P/ASX200 dropped by 2.33%, and South Korea's Kospi Index shed 0.84%.
Across the causeway, Singapore's Straits Times Index fell by 1.1%.