KLCI plunges to intraday low as US tariff hike on China goods takes effect

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KUALA LUMPUR (May 10): The FBM KLCI closed down 8.26 points or 0.51% today at its intraday low as the tariff hike to 25% from 10% on US$200 billion worth of US-bound cargoes leaving China was announced.

At Bursa Malaysia, the KLCI ended lower at 1,610.27 after plunging in the final trading minutes although China equities erased intraday losses to close higher.

In China, the Shanghai Stock Exchange Composite ended up 3.1% at its intraday high while Hong Kong's Hang Seng rose 0.84%. Elsewhere across Asia, South Korea's Kospi also erased losses to close up 0.29% while Japan's Nikkei 225 fell 0.27% after cutting losses.

Reuters wrote that global stocks made gains on Friday as investors held out hopes for a trade deal between the US and China, even as another round of US tariffs on Chinese goods took effect. It was reported that European stock markets bounced off six-week lows, with Germany's trade-sensitive DAX index leading the charge with a 1% rise.

It was reported that US President Donald Trump's tariff increase to 25% from 10% on US$200 billion of Chinese goods kicked in on Friday, and Beijing said it would strike back. It was reported that top US and Chinese negotiators are in talks to try to rescue a faltering deal aimed at ending a 10-month trade war between the world's two largest economies.

According to Reuters, the White House has said the two sides would resume negotiations on Friday morning in Washington after concluding the first of two days of talks on Thursday. It was reported that the resumption in negotiations encouraged some investors to cling to hopes that the US administration could revoke the new tariff hike once a deal is reached.

In Malaysia, Areca Capital Sdn Bhd chief executive officer Danny Wong Teck Meng told theedgemarkets.com that while the KLCI fell, the broader market remained stable.

Across Bursa Malaysia, 2.29 billion shares were traded for RM1.84 billion. Top decliners included KLCI stocks Petronas Gas Bhd and Tenaga Nasional Bhd.

“The KLCI closed lower, partly dragged by stocks such as Tenaga," Wong said.

At a glance, the KLCI closed lower after a plunge in the final trading minutes following a sharp drop in Petronas Gas' share price. Petronas Gas ended down 30 sen at RM17 while Tenaga closed 14 sen lower at RM11.80.