KLCI meanders higher as sentiment stays tepid

KLCI meanders higher as sentiment stays tepid
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KUALA LUMPUR (March 4): The FBM KLCI meandered higher at mid-morning, lifted by select blue chips against the backdrop of wobbly regional markets but the local sentiment appeared to stay tepid.

At 10am, the FBM KLCI rose 2.02 points to 1,480.66.

Losers led gainers by 393 to 148, while 266 counters traded unchanged. Volume was 553.22 million shares valued at RM365.89 million.

The gainers included PPB Group Bhd, Kobay Technology Bhd, Hong Leong Financial Group Bhd, Panasonic Manufacturing Malaysia Bhd, Hartalega Holdings Bhd, Malayan Banking Bhd and Apollo Food Holdings Bhd.

The actives included Vortex Consolidated Bhd, XOX Bhd, Careplus Holdings Bhd, AirAsia X Bhd, Eden Inc Bhd and DGB Asia Bhd.

The decliners included Nestle (M) Bhd, KESM Industries Bdh, Carlsberg Brewery Malaysia Bhd, Heineken Malaysia Bhd, Kuala Lumpur Kepong Bhd, Allianz Malaysia Bhd, Pentamaster Corp Bhd, Petronas Dagangan Bhd and Genting Bhd.

Reuters said Asian shares wobbled on Wednesday and bonds held gains, as an emergency rate cut from the US Federal Reserve (Fed) did little to soothe investor fears over the coronavirus's widening fallout.

The surprise 50 basis point cut came with commentary highlighting the limits of monetary policy, and Wall Street indexes fell sharply, gold surged and the US dollar sank, it said.

Hong Leong IB Research said in the US, the decision to cut rates by half a percentage point came earlier than expected in an unscheduled Fed meeting (where the next Federal Open Market Committee will be on March 17-18) amid coronavirus fears.

The research house said the rare move by the Fed has given a booster after the opening bell on Wall Street, but traders took it negatively as policy makers could be sending signals that the situation could be much weaker than anticipated.

“With that, we believe the near term trading tone will be downward bias with the resistance set along 27,000, while support is located around 24,600.

“Tracking the negative performance on Wall Street overnight, we expect the near term trading momentum would be downward bias (albeit with a short-lived rebound).

“Also, the sudden interest rate cut by the policy makers could be signalling that further uncertainty and downside risk to be expected under the Covid-19 situation. Hence, the upside on the FBM KLCI would be limited along 1,500 and KLCI’s support will be located around 1,444-1,450,” it said.