KLCI loses 0.99% as global sell-off persists in Asia

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KUALA LUMPUR (Aug 15): The FBM KLCI lost 0.99% at mid-morning as a sell-off in global stocks persisted in Asia, tracking the overnight fall at Wall Street.

At 10am, the FBM KLCI fell 15.75 points to 1,584.56. The index had earlier slipped to a low of 1,582.81.

Losers thumped gainers by 567 to 70, while 191 counters traded unchanged. Volume was 533.20 million shares valued at RM344.73 million.

The top losers included Carlsberg Brewery Malaysia Bhd, Hong Leong Bank Bhd, Aeon Credit Service (M) Bhd, Genting Plantations Bhd, Hong Leong Industries Bhd, Hong Leong Financial Group Bhd, Kuala Lumpur Kepong Bhd, Public Bank Bhd, Fraser & Neave Holdings Bhd and LPI Capital Bhd.

The actives included Datasonic Group Bhd, KNM Group Bhd, HeiTech Padu Bhd, Genting Malaysia Bhd and Malaysia-listed Hang Seng Index-linked put warrants.

The gainers included Allianz Malaysia Bhd, SBC Corp Bhd, Atlan Holdings Bhd and Malaysia-listed Hang Seng Index-linked put warrants.

Global stocks slumped to more than two-month lows in early Asian trade on Thursday, tracking the Wall Street slide as an inverted US bond yield curve sent a flashing warning to investors about rising recession risks, according to Reuters.

Yields on 10-year US Treasury notes fell below the two-year yield, intra-day, for the first time since 2007, in what is known as a yield curve inversion and widely seen by investors as a sign that a recession is coming, it said.

Hong Leong IB Research said with the ongoing unresolved trade tensions between the US and China, sentiment has worsened with recession warnings from the inverted yield curve and investors are further reducing their exposure on equities and rushing for safe haven assets (gold, US dollar and Japanese yen).

“Hence, Wall Street is likely to undergo further selling pressure if the trade tensions and inversion of yield curve persist over the near term; the Dow could trend lower towards 24,700-25,000.

“Given the inverted yield curve signal, which led to a sharp decline on Wall Street, we opine that the selling pressure is likely to spill over towards stocks on the local front especially the banking stocks and the FBM KLCI could revisit the immediate support around 1,572.

“Nevertheless, traders may look into short-term opportunities within internal catalyst such as ECRL or immigration tenders over the near term,” it said.