KLCI loses 1.29% on lockdown worries; glove makers drag

KLCI loses 1.29% on lockdown worries; glove makers drag
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KUALA LUMPUR (Jan 11): The main index of Bursa Malaysia lost 1.29% in the mid-morning today, against a backdrop of pausing regional markets, as local sentiment stayed tepid on lockdown fears in Malaysia.

The benchmark index was also pressured as index-linked glove makers Hartalega Holdings Bhd and Supermax Corp Bhd dragged.

At 10am, the FBM KLCI had lost 20.75 points to 1,612.44.

Market breadth was negative with losers outpacing gainers by 640 to 341, while 386 counters traded unchanged. Trading volume was 2.451 billion shares valued at RM1.89 billion.

The losers included CN Asia Corp Bhd, Oriental Interest Bhd, Hartalega, Heineken Malaysia Bhd, Supermax, Nestle (Malaysia) Bhd, TIME dotCom Bhd, Malayan Banking Bhd (Maybank) and Malaysian Pacific Industries Bhd.

The actively traded stocks included Bintai Kinden Corp Bhd, AT Systematization Bhd, Vortex Consolidated Bhd, HLT Global Bhd, Rubberex Corp (M) Bhd, Yong Tai Bhd, Inix Technologies Holdings Bhd and DGB Asia Bhd.

The gainers included Kuala Lumpur Kepong Bhd (KLK), KPower Bhd, Fraser & Neave Holdings Bhd (F&N), Hengyuan Refining Company Bhd, UWC Bhd, Sarawak Oil Palms Bhd and Pharmaniaga Bhd.

Reuters said Asian shares took a breather today, while Treasury yields were at 10-month highs as "trillions" in new US fiscal stimulus plans were set to be unveiled this week, stoking a global reflation trade.

Investors were keeping a wary eye on US politics as pressure grew to impeach President Donald Trump, though signs were an actual trial could be some time away, it said.

Inter-Pacific Research Sdn Bhd said after a moribund early session, the KLCI surged in last Friday’s afternoon session to not only erase the entire week’s losses, but to also make some headway.

In its daily bulletin today, the research house said last Friday’s gains were largely the result of selected bargain hunting for glove maker stocks that made strong headway following their recent weakness.

It said away from the key index, however, conditions remained insipid with market breadth decidedly negative with selling picking up pace as trading volume climbed past the 10 billion mark.

Inter-Pacific said the burst of foreign buying helped to lift the key index over the past two sessions and while their participation was positive for the overall market environment, it remained to be seen if the trend would be sustained into the coming week.

“As it is, the buying could just be merely bargain hunting after Malaysian equities, particularly glove makers, were sold down since late last year and as increases in Covid-19 cases worldwide renewed the buying impetus.

“Nevertheless, last Friday’s gains helped the KLCI to extricate from its oversold condition and we think it could also set the stage for further recovery over the near term as we think glove maker stocks could still garner buying support.

“Therefore, we think it may attempt to make a pass at the next hurdle at the 1,640 level before attempting to climb back to the 1,650 level. The support [levels], meanwhile, are at 1,620 and 1,600 points respectively.

“In the broader market, their consolidation trend appears to be still in progress, but with the key index showing signs of a sustained recovery, lower liners could soon see a rebound setting in as well, with bargain hunting for some of the beaten-down sector leaders returning,” it said.