KUALA LUMPUR (April 14): The FBM KLCI pared some of its gains, despite the bounce at regional markets, as domestic investors appeared to digest February manufacturing data that pointed to further slowdown in the second quarter of 2020.

AmBank Group Research said industrial production in Malaysia in the second quarter of 2020 is set to be worse, both in terms of exports and domestic demand.

In an economics report today, AmBank Group chief economist and head of research Dr Anthony Dass, however, said the downside risk is likely to be contained with the rolling out of the stimulus measures in both the fiscal and monetary aspects.

Having said that, Dass, who is also an adjunct professor in economics at the University of New England, Sydney, Australia, added that until more is known about the probable length of the pandemic, businesses are likely to remain highly risk-averse.

At 10.02am, the FBM KLCI was up 5.06 points to 1,361.09. The index had earlier risen to a high of 1,361.89.

Gainers led losers by 365 to 139, while 250 counters traded unchanged. Trading volume was 1.13 billion shares valued at RM331.29 million.

Gainers included Nestle (M) Bhd, Panasonic Manufacturing Malaysia Bhd, Heineken Malaysia Bhd, Malaysia Airports Holdings Bhd, Syarikat Takaful Malaysia Keluarga Bhd, KESM Industries Bhd, Allianz Malaysia Bhd, Frontken Corp Bhd and Greatech Technology Bhd.

The actives included Lambo Group Bhd, Vortex Consolidated Bhd, Minetech Resources Bhd, Gamuda Bhd, Hubline Bhd, DGB Asia Bhd and Hibiscus Petroleum Bhd.

The decliners included Petronas Dagangan Bhd, Ajinomoto (M) Bhd and Malaysia-listed Hang Seng Index-linked put warrants.

Reuters said Asian stocks bounced on Tuesday on hopes the coronavirus outbreak may be peaking, though sentiment was cautious ahead of Chinese trade data and corporate earnings as investors worried about a deep global recession.

Chinese shares started firm with the blue-chip index up 0.7%. Australian shares were up 0.6% while South Korea's Kospi index and Japan's Nikkei each gained 1.4%, it said.

Hong Leong IB Research said that in tandem with the negative sentiment on Wall Street as investors will be assessing 1Q20 results on the back of this Covid-19 episode, selling pressure is likely to spill over to stocks on the local exchange.

“We advise to 'Sell Into Rally' as we believe the key index is overbought and the near-term trading range for FBM KLCI will be located within 1,330-1,370.

“Nevertheless, we believe trading interest will be seen within healthcare (gloves, medical equipment) related and gold-related stocks as investors continue to monitor the developments on the unsettled Covid-19 situation and rising gold prices, respectively,” it said.