KLCI pares gains, struggles to breach 1,700 threshold

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KUALA LUMPUR (Feb 18): The FBM KLCI pared some of its gains at mid-morning today and appeared to be struggling to cross the 1,700 threshold.

At 10am, the FBM KLCI was up 4.64 points to 1,693.47. The index had earlier risen to a high of 1,695.61.

Gainers led losers by 337 to 163, while 305 counters traded unchanged. Volume was 786.15 million shares valued at RM299.84 million.

The top gainers included Carlsberg Brewery Malaysia Bhd, Heineken Malaysia Bhd, Fraser & Neave Holdings Bhd and Aeon Credit Service (M) Bhd.

The actives included Sapura Energy Bhd, Borneo Oil Bhd, Eduspec Holdings Bhd, Bumi Armada Bhd, Iris Corp Bhd, Sumatec Resources Bhd and KNM Group Bhd.

The losers included Riverview Rubber Estates Bhd, LPI Capital Bhd, Dutch Lady Milk Industries Bhd, Time dotCom Bhd and Hap Seng Consolidated Bhd.

Asian share markets firmed on Monday as investors dared to hope for both progress at Sino-US trade talks in Washington this week and more policy stimulus from major central banks, according to Reuters.

MSCI's broadest index of Asia-Pacific shares outside Japan added 0.3%, partially recovering from a sharp fall last Friday (Feb 15), it said.

Hong Leong IB Research said in wake of the optimistic progress from the US-China trade talks and increasingly dovish Fed coupled with Trump's willingness to extend the March 1 deadline and could even remove the tariffs if a deal is done, the Dow is envisaged to trend higher this week.

However, it said growing worries over the global economy coincide with a deteriorating 1Q19 earnings outlook — as consensus S&P 500's earnings per share (EPS) growth have shrunk to below -0.5% from around +4-5% at the start of the year — coupled with the overbought technical readings could suggest limited upside ahead with stiff resistances at 26,000-26,300 while supports are pegged at 25,000-25,300 zones.

On the FBM KLCI, the research house said Dow's 1.7% rally last Friday and positive expectations of the resumption of US-China trade talk in Washington this week should bode well for KLCI to retest congested resistances at 1,700-1,706 levels.

"However, sentiment would remain cautious as the stream of earnings release accelerates during this February reporting season (which is unlikely to excite market).

"In addition, foreign trade flows have turned negative over the past two trading days and may limit the upside potential on the key index. Supports are near 1,666-1,679 levels," it said.