KLCI pares loss but cautious sentiment persists

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KUALA LUMPUR (Dec 12): The FBM KLCI pared some of its loss at the midday break but remained in negative territory as local sentiment remained cautious on the lack of fresh catalysts.

At 12.30pm, the FBM KLCI was down 5.93 points to 1,738.64.

Market breadth was negative with 537 losers and 141 gainers, while 272 counters traded unchanged. Volume was 716.16 million shares valued at RM679.99 million.

The top losers included Petronas Gas Bhd, Fraser & Neave Holdings Bhd, Lafarge Malaysia Bhd, Guinness Anchor Bhd, UMW Oil & Gas Corporation Bhd, Oriental Holdings Bhd, Shell Refining Company (Federation of Malaya) Bhd, Negri Sembilan Oil Palms Bhd, United Malacca Bhd and Dutch Lady Milk Industries Bhd.

Malaysian Airline System Bhd was the most actively traded counter with 50.50 million shares done. The stock fell 1.85% or half a sen to 26.5 sen.

The other actives included Compugates Holdings Bhd, SapuraKencana Petroleum Bhd, Perisai Petroleum Teknologi Bhd, Tiger Synergy Bhd, KNM Group Bhd and Bumi Armada Bhd.

The top gainers included Perduren (M) Bhd, Kawan Food Bhd, Batu Kawan Bhd, United Plantations Bhd, Pharmaniaga Holdings Bhd, My E.G. Services Bhd and Karex Bhd.

Regionally, the dollar rose on Friday after upbeat U.S. data suggested weaker oil prices are providing additional momentum for the American economy, which also underpinned Asian shares, according to Reuters.

MSCI's broadest index of Asia-Pacific shares outside Japan was flat in early trade, though on track for a loss of over 2 percent for the week.

Japan's Nikkei stock average was up 0.4 percent in early trade, as a weaker yen helped exporter shares, but was poised to book a loss of more than 3 percent for the week.

U.S. crude futures continued to drop after falling below the key psychological support level of $60 a barrel for the first time in five years, and stood at $59.15 in Asia, down more than 1 percent on the day, it said.

Maybank IB head of retail research and chief chartist Lee Cheng Hooi in a note to clients Friday said the FBM KLCI tumbled 20.95 points to 1,744.57 yesterday, while the FBMEMAS and FBM100 also closed lower by 135.81 points and 129.34 points, respectively.

He said in terms of market breadth, the gainer-to-loser ratio was 178-to-628 while 241 counters were unchanged, adding that a total of 1.23 billion shares were traded valued at RM1.50 billion.

Lee said he recommends a “Sell on Rallies” stance for the index.

He said the KLCI Dec Futures moved into a small 2.57-point discount against the FBM KLCI.

“We expect weak buying at the supports of 1,730 to 1,742, whilst very heavy liquidation would be at the resistances of 1,744 and 1,794. The index will be volatile after heavy foreign selling emerged in early November at 1,858.09.

“After a rebound that stalled at 1,845.76 at end-November, the index plunged to a fresh low of 1,730.77 this Tuesday.

“Price rebounds remain pyrrhic in nature and still should be sold down, as the FBM KLCI will trace out a window dressing rebound that might not be sustainable at all,” he said.