KLCI pares loss, stays weak on gloomy global outlook

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KUALA LUMPUR (Jan 14): The FBM KLCI pared some of its loss at the midday break on Wednesday, but remained weak on a still gloomy global growth forecast by the World Bank.

At 12.30 pm, the FBM KLCI was down 5.68 points to 1,743.22. The index had earlier dipped to a low of 1,736.77.

Gainers led losers by 357 to 309, while 269 counters traded unchanged. Volume was 1 billion shares valued at RM1.11 billion.

The top decliners included PPB Group Bhd, UMW Holdings Bhd, Amway (M) Holdings Bhd, CIMB Group Holdings Bhd, Malayan Banking Bhd, Boustead Heavy Industries Corporation Bhd, RHB Capital Bhd, Genting Bhd and Sime Darby Bhd.

Minetech Resources Bhd was the most actively traded counter with 48.61 million shares done. The stock was flat at 10.5 sen.

The other actives included Systech Bhd, IFCA MSC Bhd, Hubline Bhd, CIMB, Jobstreet Corporation Bhd and Iris Corporation Bhd.

The gainers included British American Tobacco (M) Bhd, Tenaga Nasional Bhd, MISC Bhd, SCGM Bhd, KSL Holdings Bhd, Pintaras Jaya Bhd, Malaysia Airports Holdings Bhd and Genting Plantations Bhd.

Concerns about the global economy battered commodities and kept Asian equities subdued on Wednesday, while the euro was pinned near nine-year lows as investors bet the European Central Bank was just a week away from launching a new stimulus campaign, according to Reuters.

Copper futures suddenly plunged 6.3 percent to $5,489 a tonne as major chart support cracked. The industrial metal is often considered a weathervane of world demand, it said.

Not helping the mood was news that the World Bank had cut its 2015 global growth forecasts to 3 percent from 3.4 percent because of sluggishness in the euro zone, Japan and some major emerging economies, said Reuters.

Maybank IB head of retail research and chief chartist Lee Cheng Hooi in a note to clients Wednesday said the FBM KLCI rose 13.82 points to 1,748.90 yesterday, while the FBMEMAS and FBM100 also closed higher by 90.41 points and 88.39 points, respectively.

He said that in terms of market breadth, the gainer-to-loser ratio was 503-to-312 while 275 counters were unchanged, adding that  a total of 1.91 billion shares were traded valued at RM2.12 billion.

Lee said he recommended a “Nibble on Dips” stance for the index.

He said the KLCI Jan Futures moved into a 5.40-point discount against the FBM KLCI.

“We expect minor nibbling at the supports of 1,718 to 1,748, whilst heavy profit taking would be at the resistances of 1,750 and 1,770

“The index will be volatile after heavy foreign selling emerged in Nov and the index plunged to a fresh low of 1,671.82 on 17 Dec.

“The window dressing rebound phase could have stalled at 1,770.52 (30 Dec). In view of the volatile DJIA trend at lofty levels, it will be very wise to range trade the FBM KLCI between stipulated supports and resistances,” he said.