KLCI pares loss, but stays weak as regional markets tumble

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KUALA LUMPUR (Jan 16): The FBM KLCI pared some of its loss at the midday break on Friday, but remained in the negative zone as regional markets stumbled.

At 12.30pm, the FBM KLCI was down 2.43 points to 1,742.57. The index had earlier dipped to its intra morning low of 1,732.35.

The top losers included Petronas Gas Bhd, Nestle (M) Bhd, LPI Capital Bhd, Carlsberg Brewery (M) Bhd, Hong Leong Financial Group Bhd, CIMB Group Holdings Bhd, Scientex Bhd, RHB Capital Bhd, IJM Plantations Bhd and New Hoong Fatt Holdings Bhd.

The actives included Minetech Resources Bhd, Systech Bhd, Hubline Bhd, IFCA MSC Bhd, Nova MSC Bhd, Privasia Technologies Bhd, SapuraKencana Petroleum Bhd and Tiger Synergy Bhd.

The gainers included Asia File Corporation Bhd, United Plantations Bhd, Panasonic Malaysia Manufacturing Bhd, British American Tobacco (M) Bhd, PPB Group Bhd, SapuraKencana Petroleum Bhd, Tahps Group Bhd, Manulife Holdings Bhd, SCGM Bhd and QL Resources Bhd.

Asian shares stumbled on Friday and the dollar skidded against the safe-haven yen, after Switzerland's unexpected move to abandon its currency cap jolted markets already roiled by plunging commodities prices, according to Reuters.

MSCI's broadest index of Asia-Pacific shares outside Japan shed about 0.6 percent. A resurgent yen pressured exporter shares and helped push Japan's Nikkei stock average down 2.8 percent, it said.

M & A Securities research head Rosnani Rasul said Wall Street made a new year record after registering fifth consecutive day of decline, hammered by negative surprise from the US and also Switzerland.

She said the S&P 500 and DJIA lost a further 18.60 (-0.92%) and 106.38 (-0.61%) points to end at 1,992.67 and 17,320.71 respectively.

Rosnani said US banks reported below expectation results in this on-going results season including that of Citibank and Bank of America, suggesting that the world’s biggest economy may have experience rough ride in 4Q14 GDP.

“Added with disappointing retails sales, it is almost a done deal that US may report a softer GDP growth in the last quarter of 2014.

“Added to the shock, Switzerland lifted the floor of Swiss Franc, a move that has been around since the last 3 years to help Swiss Franc from strengthening,” she said.

Rosnani said that as a result of this and significant migration of investors’ interest into safe haven asset, Swiss Franc gained by a whopping 25% against the Dollar.

She said the move was seen as pro-active ahead of the ECB potential 4th quantitative easing measures.

“True enough Swiss Franc had a field day yesterday as can be seen in their strong trajectory.

“Nonetheless, this will not be long given the fact that benchmark rate there has been cut and hence, a precursor for a weakening home currency.

“Notwithstanding that, these negative surprises will be enough to push investors to the sideline today and keep intact their risk taking and risk tolerance,” she said.