KLCI lower on US markets, banking stocks

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KUALA LUMPUR (Jan 28): The FBM KLCI fell 0.4% as banking stocks weighed on the broader market. Malaysian shares also fell following a lower overnight close in US markets.

At 5pm, the KLCI was down 7.29 points at 1,795.88 on losses in stocks like Malayan Banking Bhd and Hong Leong Bank Bhd.

“The index fell today following the decline in US markets overnight,” a remisier told  theedgemarkets.com.

Banking stocks fell amid concerns Singapore's move to ease monetary policy might prompt regional central banks to do the same.

Later this evening, Bank Negara Malaysia will announce its monetary policy statement. The central bank had in November last year maintained its overnight policy rate at 3.25%

Today, an economist told theedgemarkets.com said there was a possibility of an interest rate cut by Bank Negara.

“The trend of slower growth and deflation is a strong argument for a rate cut or monetary easing. Central banks are bracing themselves for the impact of deflation as falling oil prices have contributed to a deflationary trend globally.

“Some Asian countries like India and South Korea are beginning to warm up to the idea of cutting interest rates.” he said over telephone.

Following Singapore's move to ease monetary policy, the ringgit strengthed to 2.6793 against the Singapore dollar.

Against the US dollar, the ringgit stood at 3.6185.

Across Bursa Malaysia, 2.01 billion shares worth RM2.31 billion were traded. There were 440 decliners against 340 gainers while 339 counters were unchanged.

Top decliners included Hong Leong Financial Group Bhd, Malayan Banking Bhd and Petronas Chemicals Bhd.

Dutch Lady Milk Industries Bhd led gainers while Asia Bioenergy Technologies Bhd was the counter with the highest number of trades.

Across the region, South Korea’s Kospi rose 0.47% while Hong Kong’s Hang Seng gained 0.22%.

Reuters reported that Asian stocks showed some resilience on Wednesday as investors speculated whether the Federal Reserve could take a dovish turn in its post-meeting statement later in the session, amid signs a stronger dollar was hurting U.S. corporate profits.