KLCI remains lacklustre on reinstatement of MCO, proclamation of emergency

KLCI remains lacklustre on reinstatement of MCO, proclamation of emergency
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KUALA LUMPUR (Jan 12): The main index of Bursa Malaysia remained lacklustre today following the reinstatement of the movement control order (MCO) in several states.

Yang di-Pertuan Agong Al-Sultan Abdullah Ri'ayatuddin Al-Mustafa Billah Shah today also consented to the proclamation of emergency until Aug 1, 2021 to contain Covid-19.

At 10am, the FBM KLCI had lost 10.77 points to 1,606.48.

Market breadth was negative with 511 losers and 321 gainers, while 393 counters traded unchanged. Trading volume was 1.88 billion shares valued at RM1.26 billion.

The decliners included Carlsberg Brewery Malaysia Bhd, Public Bank Bhd, PPB Group Bhd, Hong Leong Industries Bhd, Heineken Malaysia Bhd, Hong Leong Bank Bhd (HLB), KPower Bhd, UWC Bhd and Euro Holdings Bhd.

The actively traded stocks included Iris Corp Bhd, Hubline Bhd, Vsolar Group Bhd, AT Systematization Bhd, Key Alliance Group Bhd, Bintai Kinden Corp Bhd, Lion Industries Corp Bhd and HLT Global Bhd.

The gainers included Hong Leong Financial Group Bhd (HLFG), ViTrox Corp Bhd, Frontken Corp Bhd, Scientex Bhd, Apollo Food Holdings Bhd, KESM Industries Bhd and CB Asia Corp Bhd.

Reuters said Asian stocks were mostly lower today, tracking Wall Street declines as political turmoil in Washington and rising coronavirus cases worldwide weighed on sentiment ahead of the start of the quarterly earnings season.

Political uncertainty dominated trading as House Democrats introduced a resolution to impeach US President Donald Trump, accusing him of inciting insurrection following a violent attack on the Capitol last week, it said.

Inter-Pacific Research Sdn Bhd said once again, markets were unable to build on its previous gains and ended on a weaker note yesterday with profit taking streaming in as another lockdown made many market players jittery.

In its daily bulletin today, the research house said among the worst affected were banking stocks that were deemed to be the biggest losers from the impending MCO.

Inter-Pacific said glove maker stocks were also not spared as they also succumbed to a new bout of profit taking. Meanwhile, the wariness sent most market players to the sidelines, leaving trading volume to dip to just 6.62 billion shares.

It said the MCO is likely to set back the country’s economic recovery prospects for the first quarter of 2021 (1Q21) and this could mean further near–term downside risk as market players assess the impact of the latest lockdown on corporate earnings performances.

“At this juncture, however, the impact could be benign as the lockdown is only for two weeks, assuming that it is not extended which could mean further impediments to the country’s economic recovery in due course.

“Nevertheless, we think the market’s downside could be limited as more economic activities are permitted to continue this time, and the soon-to-be available vaccines should provide some cushioning effects,” it said.  

Still, Inter-Pacific said the market’s near-term conditions may remain fluid due to lingering uncertainties and the downside bias could leave the key index at 1,600 points, which is its first major support level.

“Below that, the support [levels] are at 1,590 and 1,580 points, while the resistance [levels] are at 1,629 and 1,631 points respectively.

“After their recent consolidation, lower liners and broader market shares saw some reprieve yesterday.

“However, conditions are still ambiguous at this juncture, in view of the new round of MCO that could leave sentiments guarded for longer. Therefore, we think the near-term gyrations will persist for now with profit-taking activities poised to continue as more participants retreat to the sidelines until there is more clarity of the market’s direction,” it said.