KLCI pares gains as US stock futures dip amid gloomy economic outlook

KLCI pares gains as US stock futures dip amid gloomy economic outlook
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KUALA LUMPUR (March 18): The FBM KLCI pared some of its gains at mid-morning Wednesday as US stock futures dipped in early Asian trade against the backdrop of worsening global economic outlook amid the Covid-19 pandemic.

Asia-Pacific economic growth in 2020 will more than halve to less than 3% as the global economy enters a recession, said S&P Global Ratings.

At 10am, the FBM KLCI was up 6.1 points to 1,262.68. The index had earlier risen to a high of 1,275.23.

Losers edged gainers by 299 to 277, while 247 counters traded unchanged. Volume was 655.86 million shares valued at RM370.19 million.

Early gains for the benchmark index were shaved off as index-linked Hap Seng Consolidated Bhd and Malaysia Airports Holdings Bhd found themselves among the top losers.

The gainers included Panasonic Manufacturing Malaysia Bhd, Fraser & Neave Holdings Bhd, Carlsberg Brewery Malaysia Bhd, Petronas Dagangan Bhd and PPB Group.

The actives included Borneo Oil Bhd, Sapura Energy Bhd, Bumi Armada Bhd, My EG Services Bhd and Hibiscus Petroleum Bhd.

Reuters said US stock futures stepped back in choppy early Asian trade on Wednesday as concerns about the widening coronavirus epidemic weighed against hopes policy support would combat its economic fallout.

US stock futures fell 2% after the S&P 500 gained 6% on Tuesday, paring a little under half of its huge losses on Monday, it said.

Hong Leong IB Research said following a 5.2% relief rally on Dow at 21,237 (after it nosedived 32.8% or 9,689 points to an intraday low of 19,882 from an all-time high of 29,568) as Trump seeks US$1 trillion in stimulus coupled with the US Federal Reserve’s aggressive interest rate cut to zero and relaunch of a US$700 billion QE program, the research house anticipated buying support to spill over to the local bourse after a 332-pt or 20.9% year-to-date plunge on KLCI.

“However, any rebound could be capped near 1,300-1,369 levels as investors continue to assess the financial and economic fallout from the Movement Control Order imposition from March 18-31 amid exacerbation of Covid-19 as two patients died and confirmed cases surged to 673,” it said.