KLCI falls 1.5% following dissolution of Parliament

KLCI falls 1.5% following dissolution of Parliament
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KUALA LUMPUR (Oct 11): The FBM KLCI fell 1.5% in the mid-morning on Tuesday (Oct 11), tracking overnight losses on Wall Street and against the added factor of the dissolution of Parliament.

At 10.45am, the benchmark index had lost 21.09 points to 1,384.91.

The top losers included Nestlé (Malaysia) Bhd, Malaysian Pacific Industries Bhd, Dutch Lady Milk Industries Bhd, Kuala Lumpur Kepong Bhd (KLK), Petronas Gas Bhd, Panasonic Manufacturing Malaysia Bhd, Carlsberg Brewery Malaysia Bhd and Hong Leong Bank Bhd.

Hong Leong Investment Bank Bhd in a traders’ brief on Tuesday said that tracking the extended Wall Street slump and higher perceived market risk premium for Malaysia following the dissolution of Parliament on Monday, the KLCI may resume its downward consolidation.

“Overall, wild swings will prevail in October (resistance: 1,428-1,436-1,454; support levels: 1,348-1,363-1,384) in the wake of jittery market backdrops, driven by: i) global recession fears; ii) elevated inflation; iii) heightened geopolitical tensions; iv) potential downgrades in Malaysian corporate earnings and gross domestic product [growth forecasts]; and v) resumption of foreign net selling,” it said.

Reuters said US stocks fell on Monday, with the Nasdaq posting its lowest close since July 2020, as investors worried about the impact of higher interest rates and pulled out of chipmakers, after the US announced restrictions aimed at hobbling China's semiconductor industry.

US Federal Reserve (Fed) vice-chair Lael Brainard said tighter US monetary policy has begun to be felt in an economy that may be slowing faster than expected, but the full brunt of Fed interest rate increases still won't be apparent for months, Reuters reported.