KUALA LUMPUR (July 27): The FBM KLCI pared some of its gains as regional markets across the board came under some selling pressure against the backdrop of tit-for-tat consulate closures in China and the United States.

At 10am, the FBM KLCI was up 2.70 points to 1,592.31. The index had earlier risen to a high of 1,595.00.

Gainers edged losers by 395 to 374, while 363 counters traded unchanged. Trading volume was 2.54 billion shares valued at RM1.54 billion.

The top gainers included Kossan Rubber Industries Bhd, Kuala Lumpur Kepong Bhd, Top Glove Corp Bhd, Careplus Group Bhd, Pharmaniaga Holdings Bhd, SCGM Bhd, Supermax Corp Bhd, Dutch Lady Milk Industries Bhd and Doupharma Biotech Bhd.

The actively traded stocks included Iris Corp Bhd, Bioalpha Holdings Bhd, Jadi Imaging Bhd, Nexgram Holdings Bhd, Hubline Bhd, Dagang NeXchange Bhd, Careplus and JCY International Bhd.

The decliners included SAM Engineering & Equipment (M) Bhd, Carlsberg Brewery Malaysia Bhd, Ajinomoto (M) Bhd, Dufu Technology Corp Bhd, Pentamaster Corp Bhd, Public Bank Bhd, Aeon Credit Service (M) Bhd and JF Technology Bhd.

Reuters said US stock futures slipped and Asian shares came under pressure in early Monday trade as tit-for-tat consulate closures in China and the United States fanned worries about worsening diplomatic ties between the world's two largest economies.

S&P500 futures dropped 0.2% while Nasdaq futures lost 0.3%. Japan's Nikkei fell 1.3%, re-opening after a long weekend, it said.

Hong Leong IB Research said the KLCI has erased all its losses year-to-date on strong buying interest from retailers and local funds, which amounted to RM10.6 billion and RM8 billion respectively versus massive foreign selloff of RM18.6 billion.

It said with that, the million-dollar question now is whether it can hold on to that and advance further amid rising Covid-19 count globally, souring US-China relations, domestic political uncertainty, a bleak August reporting season, stretched valuation and growing speculation about the 15th general election by end 2020.

“Hence, the possibility of further overbought consolidation in August remains high. Still, the pullback shouldn’t be as severe (unlike 1Q20) as liquidity factors (rejuvenated retail participation and the US Federal Reserve’s 'unlimited QE' arsenal) would help cushion it.

“Technically, a strong breakout above 1,617 would open the door for higher targets at 1,634 (weekly upper BB) and 1,679 (200W SMA) zones.

“On the flip side, a breakdown below 1,563 would trigger further selling towards 1,549 (30D SMA) and 1,522 (50d SMA) territory,” it said.