KLCI falls below 1,600 on profit taking after Friday’s gains

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KUALA LUMPUR (Sept 3): The FBM KLCI gave up most of its previous session’s gains today, as investors took profit amid US-China trade war concerns, subdued corporate earnings and disappointing factory data. 

The KLCI finished 20.62 points or 1.28% lower at its intraday low of 1,591.52, after broad-based selling across the board. The index had  jumped 16.96 points or 1.06% on Friday (Aug 30).  

Malacca Securities Sdn Bhd head of research Victor Wan told the edgemarkets.com that the profit-taking was more pronounced than what he had expected. 

He said investors were not only reacting to uncertainties arising from the trade war, but also the relatively-subdued corporate results for the second quarter.  

Market sentiment was also affected by the drop in IHS Markit Malaysia Manufacturing Purchasing Managers’ Index to 47.4 in August from 47.6 in July, amid tough demand conditions and rising cost pressures.    

Going forward, Wan expects the KLCI to remain range-bound, with support level pegged at 1,590, and resistance level at 1,600 and 1,610. 

Bursa Malaysia’s turnover was 2.26 billion shares, valued at RM1.59 billion. There were 211 gainers, 556 losers and 416 counters unchanged.

The day’s losers included Petronas Dagangan Bhd, AMMB Holdings Bhd, Sime Darby Plantations Bhd and  Petronas Gas Bhd. 
 
Elsewhere in Asia, the benchmark indexes’ performance was mixed. Japan's Nikkei 225 inched up 0.02% and China's Shanghai Stock Exchange Composite rose 0.21%. Hong Kong’s Hang Seng was down 0.39% and South Korea's Kospi fell 0.18% 

Reuters reported global stocks dropped today, hurt by U.S.-China trade frictions while the British pound fell to its lowest since January 2017, amid political uncertainty as Prime Minister Boris Johnson tried to stymie lawmakers' efforts to stop a no-deal Brexit.

In an escalation of their trade war, the US on Sunday, began imposing 15% tariffs on a variety of Chinese goods, and China began imposing new duties on U.S. crude oil.