KLCI lower on profit taking, ringgit weakens

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KUALA LUMPUR (Feb 5): The FBM KLCI fell on profit taking following substantial gains yesterday, and after US shares and crude oil prices declined in overnight trade.

At 9.04am, the KLCI fell 1.1 points or 0.1% to 1,801.92 on losses in stocks like SapuraKencana Petroleum Bhd and Tenaga Nasional Bhd.

Yesterday, the FBM KLCI rose 22.35 points or 1.25% to close at 1,803.61. The index had earlier climbed to an intraday high of of 1,831.41 before profit taking pared gains.

Today, Hong Leong Investment Bank Bhd analyst Nick Foo Mun Pang said the research firm "continue to think the ongoing rally is premature and KLCI remains vulnerable for an extended consolidation in the near term" on domestic and global factors.

These factors comprise the still-low crude oil prices and weaker ringgit, besides Greece's financial concerns. In Malaysia, Foo said the February corporate financial result reporting season might disappoint investors.
Bursa Malaysia saw some 57 million shares worth RM37 million changed hands. There were 84 gainers versus 107 decliners.

The top gainer was British American Tobacco (M) Bhd while the leading decliner was KLCC Real Estate Investment Trust.The most-active stock was JAG Bhd.

The ringgit weakened after US crude oil prices fell 9% in overnight trade on high inventory concerns.

The ringgit weakened against the US dollar at 3.5912, and compared to the Singapore dollar, the ringgit changed hands at 2.6621.

The ringgit's strength hinges on prices of crude oil, which constitutes a major portion of the Malaysian economy. The Statistics Department will announce today the country's December 2014 and full-year external trade numbers.

The external trade numbers come ahead of Bank Negara Malaysia's announcement of the nation's fourth quarter and full-year gross domestic product figures next Thursday (Feb 12).

Today, Asian markets traded lower. Japan's Nikkei fell 0.59% while South Korea's Kospi declined 0.46%.

Bloomberg reported that investors had weighed the European Central Bank’s (ECB) tightening of the terms of Greece’s bailout against China’s decision to reduce banks’ reserve ratios.

The ECB heaped pressure on Greece’s new government by restricting access to its direct liquidity lines, citing concerns about the country’s commitment to existing bailout pledges. China cut the amount of cash banks must set aside as reserves by 50 basis points, joining more than a dozen global counterparts in easing monetary policy this year.