KLCI finishes below 1,600 as late selling erases gains

KLCI finishes below 1,600 as late selling erases gains
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KUALA LUMPUR (Aug 19): The FBM KLCI failed to stay above the 1,600-point mark at the close today after late selling erased earlier gains.

The index finished 2.77 points or 0.17% lower at 1,596.45, after having risen to a high of 1,601.97 less than an hour before the market closed.

Areca Capital Sdn Bhd chief executive officer Danny Wong Teck Meng said the market was "directionless" as it sought for clues, causing it to be very volatile.

"The market has been volatile since last week," Wong told theedgemarkets.com. "As corporate earnings are being reported this week, I think that this quarter would be the worst for this year.

"We will probably only see better results in the second half of the year," he said.

"Yields have been coming down so investors are seeking for returns. Expect risky assets, like equities, to remain volatile in the coming weeks," he added.

However, the surprise 4.9% growth in second quarter gross domestic product (GDP) announced last week may prompt some foreign funds to return to the Malaysian market, Wong said.

Across Bursa Malaysia, gainers led losers by 394 to 324, while 461 counters traded unchanged. Volume was 2.21 billion shares valued at RM1.6 billion.

Elsewhere in the region, most markets gained today as hopes that central banks around the world would unleash new stimulus to boost growth eased concerns over a global recession.

Reuters reported that the hope arose as the Chinese central bank reformed its interest rate over the weekend, seen lowering corporate borrowing costs, and reports of new fiscal stimulus in Germany.

"The Sino-US trade dispute has dampened growth in Southeast Asian economies, and any policy support by the region's major trading partner — China — to shore up domestic demand will help bring buyers back to the equities market," the newswire reported.

Singapore clawed back from the previous session's losses as the Straits Times closed at 3,128.45, adding 13.42 points or 0.4%.

Jakarta Stock Exchange Composite Index gained 0.16%, while Hong Kong's Hang Seng Index rose 2.17%. Japan's Nikkei 225 also closed in green with a 0.71% rise.