KLCI remains in the red in slow start to 2H2018

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KUALA LUMPUR (July 2): The FBM KLCI remained subdued at mid-morning today after data showed business conditions across Malaysia’s manufacturing sector deteriorating albeit at a slower pace in June.

Released this morning, the headline purchasing managers’ index (PMI) registered below the neutral 50.0 threshold during June, but rose from 47.6 in May to 49.5.

At 10am, the FBM KLCI fell 3.02 points to 1,688.48.

Gainers led losers by 230 to 224, while 261 counters traded unchanged. Volume was 379.51 million shares valued at RM222.01 million.

The top losers included Public Bank Bhd, Hong Leong Bank Bhd, Pavilion REIT, Malaysian Pacific Industries Bhd, Lebtech Bhd, Lafarge Malaysia Bhd, Boustead Heavy Industries Corp Bhd, Padini Holdings Bhd and Petronas Danangan Bhd.

The actives included Sapura Energy Bhd, Hibiscus Petroleum Bhd, Advance Synergy Bhd, GSB Group Bhd, TH Heavy Engineering Bhd and Nova MSC Bhd.

The gainers included Fraser & Neave Holdings Bhd, Aeon Credit Service (M) Bhd, British American Tobacco (M) Bhd, Kuala Lumpur Kepong Bhd, DKSH Holdings (M) Bhd, Nestle (M) Bhd, United Plantations Bhd, Supermax Corp Bhd and UMW Holdings Bhd.

Asian shares were subdued Monday ahead of a week packed with major economic events, while Mexico's peso firmed as exit polls pointed to a decisive victory for presidential front-runner Andres Manuel Lopez Obrador's party, according to Reuters.

Dealers said the seemingly clear win would at least settle one source of political uncertainty. Yet leftist Obrador is also expected to inject a dose of nationalism into government and sharpen divisions with U.S. President Donald Trump, it said.

Hong Leong IB Research in a traders’ brief said the Dow rebounded over the past two trading days following a steep decline from the 25,500 level in June.

It said the MACD Line is below zero and the key index is threading below most of the short term moving averages (SMA20, 30 and 50).

“However, the RSI and Stochastic oscillators are recovering from the oversold position.

“We may anticipate further rebound on the Dow, targeting the 25,000 level. On the flip side, the support will be located around 24,000.

“Although FBM KLCI rebounded last Friday, we think the downside risk may persist as trade-related headline will continue to drive the market sentiment the week ahead, as the US is set to impose the 25% tariffs on US$34bn in Chinese products on 6th of July.

“Hence, the FBM KLCI’s upside may be capped over the near term. Nevertheless, O&G stocks are likely to trade higher on the back of steadier crude oil prices,” it said.