KLCI falls, ringgit weakens on lower oil prices ahead of OPEC meeting

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KUALA LUMPUR (June 4): The FBM KLCI fell 0.4% today while the ringgit weakened in line with lower crude oil prices. Malaysian shares and the ringgit weakened ahead of the Organization of Petroleum Exporting Countries (OPEC) meeting tomorrow (June 5) in Vienna, Austria.

Today, the KLCI fell 7.69 points to close at 1,741.48 points as oil and gas shares like Petronas Dagangan Bhd and Petronas Chemicals Group Bhd dropped among Bursa Malaysia top decliners.

Etiqa Takaful Bhd chief investment officer Norlia Mat Yusof told theedgemarkets.com: “For today, there was a modest weakness in line with lower oil prices, which is still deemed somewhat of a proxy for the Malaysian economy."

Looking ahead, Norlia said oil prices could be volatile in the short term. Today, Bloomberg data showed that Brent crude oil declined to US$63.37 per barrel while the US' West Texas Intermediate oil fell to US$59.32.

Lower crude oil prices do not bode well for the ringgit as the commodity constitutes a crucial portion of the Malaysian economy. The ringgit weakened to 3.6982 against the US dollar at the time of writing.

The ringgit had also depreciated against a strengthening US dollar in anticipation of US interest rate hikes this year.

Across Bursa Malaysia, 1.37 billion shares worth RM1.69 billion were exchanged. There were 434 decliners against 377 gainers.

United Plantations Bhd led gainers while Metronic Global Bhd was the most-actively traded stock.

In Asian share markets, Japan’s Nikkei 225 rose 0.07%, South Korea’s Kospi gained 0.47% while Hong Kong’s Hang Seng fell 0.38%.

According to Reuters, the euro continued riding high on Thursday thanks to a spike in euro zone debt yields, while in Asian equities volatile Chinese shares slid and tempered risk sentiment.