KLCI falls 15.22pts on weaker ringgit, oil

-A +A

KUALA LUMPUR (Mar 9): The FBM KLCI fell 0.84% as the ringgit weakened against a stronger US dollar as investors bet US interest rates will rise earlier than expected.

The KLCI closed at 1,791.74 points in line with dampened sentiment in Asian markets. The KLCI had pared losses after declining to an intraday low of 1,778.99 earlier.

Reuters reported that Asian stocks buckled while the dollar held firm on Monday after strong U.S. jobs data fanned expectations that the U.S. Federal Reserve may raise interest rates sooner than previously thought.

Japan’s Nikkei fell 0.95%, while South Korea’s Kospi declined 1%. Hong Kong's Hang Seng dropped 0.17%

According to Bloomberg, the ringgit weakened to 3.6800 against the US dollar, and was trading at 2.6669 against the Singapore dollar.

A stronger dollar is also expected to lower crude oil prices, which will not bode well for the Malaysian economy as the commodity forms a crucial component of the domestic economy.

In Malaysia, Danny Wong, chief executive officer of Areca Capital Sdn Bhd, attributed the fall in the KLCI to the weakening  ringgit against the US dollar.

Wong said the weaker ringgit might have led to the selldown in oil and gas- related counters such as Petronas Dagangan Bhd and Petronas Gas Bhd

“There is this perception that Malaysia is going into a crisis as the ringgit is trading near the 1997 crisis levels of around RM3.70 to RM3.80, despite Malaysia being much stronger now,” Wong said.

Bursa Malaysia saw some 2.12 billion shares worth RM1.86 billion traded. Decliners beat gainers at 544 versus 273.

British American Tobacco (M) Bhd, Nestle (M) Bhd and Petronas Dagangan led decliners, while the gainers were headed by Dutch Lady Milk Industries Bhd.

The most active stock was Privasia Technology Bhd.