KLCI gains 0.46% on weaker US employment figures and stronger ringgit

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KUALA LUMPUR (Apr 6): The benchmark FBM KLCI closed 8.42 points or 0.46% higher to finish at 1,842.94 points today after the US released weak March employment figures which also saw the a steady rise in the Malaysian ringgit.

Employers in the US added 126,000 workers in March, the fewest since December 2013, according to an April 3 report.

“The market is reflecting the disappointing US jobs data. Investors are now trying to gauge when the Federal Reserve will normalise interest rates. But now, because of the weak US jobs data, the Feds may not increase interest rates so soon,” said Areca Capital Sdn Bhd chief executive officer Danny Wong, adding that the earliest interest rate hike may be in either June or September.

He added that the FBM KLCI may be due to spill over effect from foreign funds flowing back into the regional markets.

Overall, the KLCI saw a total of 1.99 billion shares, valued at RM1.68 billion, traded.

Market breadth was mixed with 393 gainers against 379 decliners, while 342 counters remained unchanged.

Today’s top gainers included British American Tobacco (M) Bhd, Nestle (M) Bhd and Petronas Dagangan Bhd. Meanwhile, decliners were led by United Plantations Bhd, Panasonic Manufacturing Malaysia Bhd and Malaysia Airports Holdings Bhd.

The most actively traded stock today was Tiger Synergy Bhd, which saw about 157 million shares change hands.

Regionally, Japan’s Nikkei fell 0.19% to 19,397.89 points today while South Korea’s KOSPI was up by 0.05% to 2,046 points.

Singapore’s Straits Times Index was down 0.03% to 3,452.77 points while the Hong Kong Hang Seng Index rose 0.77% to 25,275.64 points.

The ringgit, on the other hand, rose 1.03% to 3.6315 against the greenback at press time.

According to Bloomberg, the ringgit was leading gains in Asia, after weak US jobs data supported the case for the Federal Reserve to hold off raising interest rates.

Foreign funds hold 29% of Malaysian sovereign debt, compared with 18% of Thai notes, making the nation vulnerable to increase in US rates that reduce the appeal of emerging-market assets, said Bloomberg.

Additionally, Brent crude oil rallied after after a preliminary pact was reached between Iran and global powers on Tehran’s nuclear programme. The commodity rose 2.53% today to US$56.34 per barrel. This may have also lent support to the ringgit as Malaysia is a net oil exporter.