KUALA LUMPUR (Nov 5): The FBM KLCI pulled back in early trade today and dipped lower in line with regional markets, as some mild profit taking took its toll on the local market.
At 9am, the FBM KLCI dipped 2.75 points to 1,682.87.
Teh decliners included Petronas Gas Bhd, Kuala Lumpur Kepong Bhd, PPB Group Bhd, Lafarge Malaysia Bhd, Globetronics Technology Bhd, Genting Bhd, Sarawak Oil Palms Bhd, BIMB Holdings Bhd and Malayan Banking Bhd.
Asian shares stumbled on Thursday after Federal Reserve Chair Janet Yellen said a December interest rate hike in the United States is a "live possibility", sending short-term U.S. bond yields to 4-1/2-year highs and pushing the dollar broadly up, according to Reuters.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.5 percent, led by 1.2 percent fall in Australian shares, it said.
M & A Securities head of research Rosnani Rasul in a market preview today said Janet Yellen told the US Congress yesterday that if the US economic data was consistent, pointing to elevating inflation, December US interest rate hike may be possible, stoking fear in Wall Street yesterday and hence, its reddish performance.
Rosnani said added to that, the US ADP National Employment Report revealed that employment in the nonfarm private business sector rose by 182,000 in October, beating consensus expectation of 180k addition, suggesting Friday’s US October unemployment rate could get knocked down further from 5.3%.
“Further, the US ISM Services index jumped to 59.1 in October from 56.9 in September thumping again consensus projection of 56.6.
“Noted with the fact that the global equity markets have been enjoying steady upside of late due to the recovery in the global oil price and palm oil price (Malaysia) but this piece of news coming from the Fed boss could take away the punch bowl,” she said.
Rosnani said she had been expecting the market to pull back due to US key economic release on Friday (read: US October unemployment rate) and that it may materialise due to the combination of above factors.