KLCI remains choppy as most global markets mired in red

KLCI remains choppy as most global markets mired in red
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KUALA LUMPUR (Feb 28): The FBM KLCI pared some of its losses at mid-morning after having slumped in early trade in tandem with global markets mired in a sea of red on fears of a coronavirus pandemic.

At 10.05am, the FBM KLCI was down 13.8 points to 1,491.79. The index had earlier slumped to a low of 1,481.31.

Market breadth was negative with 784 losers and 70 gainers, while 194 counters traded unchanged. Volume was 1.24 billion shares valued at RM676.11 million.

The top losers included Nestle (M) Bhd, Carlsberg Brewery Malaysia Bhd, Heineken Malaysia Bhd, Dutch Lady Milk Industries Bhd, Fraser & Neave Holdings Bhd, British American Tobacco (M) Bhd, KESM Industries Bhd, Ajinomoto (M) Bhd and Panasonic Manufacturing Malaysia Bhd.

The actives included Sapura Energy Bhd, XOX Bhd, Bumi Armada Bhd, AirAsia Group Bhd, Avillion Bhd, Powerwell Holdings Bhd, KNM Group Bhd and Advance Synergy Bhd.

The gainers included EITA Resources Bhd, UMW Holdings Bhd and Malaysia-listed Hang Seng Index-linked put warrants.

Reuters said global share markets headed for the worst week since the darkest days of the financial crisis in 2008 as investors braced for the coronavirus to morph into a pandemic and derail world economic growth.

Hopes that the epidemic that started in China would be over in a few months and economic activity would return to normal have been shattered, as new infections reported around the world now surpass those in China, it said.

Hong Leong IB Research said investors are likely to continue fleeing equities and rushing for bonds at the moment as the 10Y/30Y yields are hovering at all-time lows, on the back of the Covid-19 outbreak which has potential becoming pandemic, in turn affecting global trade and travel as well as potentially taking a bite out of confidence on US corporate earnings and economic growth in the mid to long term.

“However, based on the technical readings, the Dow could stage a technical rebound in the near term with the upside capped near 28,000 levels, while key supports are located around 24,700-25,000 zones.

“In wake of the bearish Wall Street trend and ahead of the special sitting of Dewan Rakyat on March 2 (to decide the next PM and/or the possibility of a snap election), we believe wild swings may continue, with key supports at 1,440-1,480, whilst resistances are set at 1,510-1,527 levels.

“Given the elevated risks and uncertainty in the near term, priority for equity investors should be the preservation of capital, with core holdings in defensive and resilient high-yield stocks,” it said.