KLCI pares loss but sentiment remains bearish

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KUALA LUMPUR (May 7): The FBM KLCI pared some of its losses at the midday break today but overall sentiment remained bearish with losers outpacing gainers.

At 12.30pm, the FBM KLCI was down 3.97 points to 1,817.00. The index had earlier dipped to its intra morning low of 1,807.12.

Losers led gainers by 360 to 279, while 327 counters traded unchanged. Volume was 831.65 million shares valued at RM704.88 million.

The top losers in the morning session included British American Tobacco (M) Bhd, Hong Leong Financial Group Bhd, Aeon Credit Services (M) Bhd, Pharmaniaga Holdings Bhd, Carlsberg Brewery (M) Holdings Bhd, PPB Group Bhd, Guinness Anchor Bhd and IJM Corporation Bhd.

The actively traded counters included Frontken Corporation Bhd, Kanger International Bhd, Vsolar Group Bhd, Hubline Bhd, Perwaja Holdings Bhd, Kinsteel Bhd, Nexgram Holdings Bhd and Kronologi Asia Bhd.

The gainers meanwhile included United Plantations Bhd, Petronas Dagangan Bhd, Bintulu Port Holdings Bhd, IQ Group Holdings Bhd, ECS ICT Bhd, MMC Corporation Bhd, Berjaya Auto Bhd and Fraser & Neave Holdings Bhd.

Asian stocks fell on Thursday, taking the lead from losses on Wall Street, while a rise in euro zone debt yields amid a global bond rout kept the euro hovering at a two-month peak versus the dollar, according to Reuters.

As European deflation fears have ebbed, a seeming reversal of trades linked to the European Central Bank's big quantitative easing has resulted in a sell-off in core European bonds and equities this week, rattling investors across asset classes, it said.

Maybank IB head of retail research and chief chartist Lee Cheng Hooi in a note to clients today said the FBM KLCI declined 6.45 points to 1,820.97 yesterday, while the FBMEMAS and FBM100 also closed lower by 34.80 points and 38.52 points, respectively.

He said that in terms of market breadth, the gainer-to-loser ratio was 355-to-452 while 313 counters were unchanged, adding that a total of 1.92 billion shares were traded valued at RM1.80 billion.

“We recommend a “Take Profit” stance for the index. The KLCI May Futures moved into a 4.47-point discount against the FBM KLCI. We expect some weak buying at the supports of 1,789 to 1,813, whilst profit-taking activities will cap rebounds at the resistances of 1,820 and 1,837.

“The index’s rebound from the 1,671.82 low finally stalled at 1,867.53 on 27 Apr 2015. The FBM KLCI’s tone may have turned weaker since that high at 1,867.53. The FBM KLCI continues to consolidate as expected with selling at the resistance areas to cap any upside for now,” he said.