KLCI remains in the negative zone as sentiment remains jittery

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KUALA LUMPUR (May 6): The FBM KLCI remained in negative territory in line with the downtrend at most regional markets.

At 12.30pm, the FBM KLCI fell 9.58 points to 1,817.84.

The top losers in the morning session today included British American Tobacco (M) Bhd, PPB Group Bhd, Batu Kawan Bhd, Carlsberg Brewery (M) Holdings Bhd, Pharmaniaga Holdings Bhd, MISC Bhd, Amway (M) Holdings Bhd and Genting Plantations Bhd.

The most actively traded counters included R & A Telecommunication Group Bhd, Sumatec Resources Bhd, KNM Group Bhd, Kinsteel Bhd, Perwaja Holdings Bhd, Perisai Petroleum Teknologi Bhd, Frontken Corporation Bhd and Daya Materials Holdings Bhd.

The top gainers included DanaInfra Nasional Bhd, New Hoong Fatt Holdings Bhd, Guinness Anchor Bhd, C.I. Holdings Bhd, Nestle (M) Bhd and Muhibbah Engineering Bhd.

Asian stocks stumbled on Wednesday in sympathy with weak US and European markets as equities investors were spooked by a vicious selloff in sovereign bonds globally, according to Reuters.

The sudden spike in bond yields is being mirrored by an equally rapid rally in resources to suggest investors are becoming less concerned about the danger of deflation, it said.

M & A Securities research head Rosnani Rasul said Wall Street gave up some precious points on Tuesday, hurt by Greece drama and widening US trade deficit which suggest that the US may be in contraction mode, economic wise in 1Q15 S&P 500 and DJIA unloaded 25.03 (-1.18%) and 142.20 (-0.79%) points to end at 2,089.46 and 17,928.20 respectively.

She said that the Greece drama had started to hurt the market sentiment again as it was rumoured that the International Monetary Fund may cut a funding lifeline to Greece unless its European partners accept more debt write downs.

She said this arm twisting strategy may cause a big slide and haircut to major EU banks which have been known to own a large amount of Greece bonds, a situation that may spook market participants given the frail EU banking system now.

Rosnani said although this rumour was not confirmed but given the stiff neck of Greece to cut cost and improve productivity may push the creditors to the edge.

Elsewhere, she said the US March trade deficit came above expectation of USD51 billion, the highest since 2008 as import elevated alarmingly. This suggests that the US may suffer economic contraction in 1Q15 after February trade deficit of USD35.9 billion.

"All these pockets of bad news will not do good to market sentiment, made worse by the fact that the US will be issuing its unemployment numbers this Friday.

"Given that, we think that market participants may continue to be cautious unless the signals are clear for them to make fresh new positions," she said.