KLCI loses 6.34 pts as ringgit weakens in anticipation of possible Fitch downgrade

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KUALA LUMPUR (June 26): The benchmark FBM KLCI closed down 0.37% or 6.34 points today to finish at 1,710.47 points, as the ringgit fell to 3.7680 against the US dollar.

At time of writing, the ringgit was also trading at 2.8012 against the Singapore dollar.

According to Reuters, the ringgit’s weakening was on concerns that Fitch Ratings may downgrade Malaysia’s credit rating in their upcoming report, partly as a result of debts run up by state-owned strategic investment fund 1Malaysia Development Bhd.

“Most emerging Asian currencies slid today to notch weekly losses as investors shied away from riskier assets while Greece stood on the brink of default, and economic data strengthened expectations that US interest rates will rise later this year,” said Reuters.

Overall, the KLCI saw a total of 1.35 billion shares, valued at RM1.43 billion, traded during the day.

Losers outweighed gainers, with 441 losers against 345 gainers, while 320 counters remained unchanged.

Among today’s gainers were KLCC Stapled Securities, Telekom Malaysia Bhd, PPB Group Bhd, Tenaga Nasional Bhd and IHH Healthcare Bhd.

The day’s decliners included MISC Bhd, Astro Malaysia Holdings Bhd, Westports Holdings Bhd, Astro Malaysia Holdings Bhd, CIMB Group Holdings Bhd and Malayan Banking Bhd.

The most actively-traded stock today was KNM Group Bhd with about 43.51 million shares changing hands.

Regionally, Japan’s Nikkei closed down 0.31%, Hong Kong’s Hang Seng index closed down 1.78%, while South Korea’s KOSPI closed up 0.25%.

Affin Hwang Investment Bank vice president and head of retail research Datuk Dr Nazri Khan said that following the bearish performance of global stocks, the FBM KLCI is expected to stage further correction with 1,700 as the immediate target, weighed down by Greece's failed negotiations, the ringgit’s renewed weakness and negative global data.

“Overall, we expect the local market to continue be trapped in the two-month downtrend channel ... With a lack of price catalysts and the on-going domestic government-linked companies (GLC) saga, market sentiment is likely to remain lacklustre in this coming week,” he said in a note today.