KUALA LUMPUR (Dec 21): The FBM KLCI fell 0.46% in early trade this morning in line with the regional markets mired in the red.

At 9.05am, the FBM KLCI fell 7.56 point to 1,643.00.

The early decliners included Hong Leong Financial Group Bhd, Public Bank Bhd, Tenaga Nasional Bhd, Press Metal Aluminium Holdings Bhd, ViTrox Corp Bhd, Malayan Banking Bhd, Genting Malaysia Bhd, Serba Dinamik Holdings Bhd, Apex Healthcare Bhd and Dialog Group Bhd.

Global stocks were sailing into Christmas on a sea of red on Friday as the threat of a U.S. government shutdown and of further hikes in U.S. borrowing costs inflamed investor unease over the economic outlook, according to Reuters.

The S&P 500 was heading for its worst quarter since the dark days of late 2008, with a loss of 15 percent so far. The Nasdaq has shed 19.5 percent from its August peak, just shy of confirming a bear market, it said.

Hong Leong IB Research in a traders’ brief said in the US, downside risk may persist after digesting the Fed’s move on the interest rates hike and potential of 2 more hikes in 2019 (more hawkish-than-expected) and softer economic expansion moving forward.

“Moreover, should there be any resurfacing of unsettled trade developments news in the media, it may dampen stock markets and market volatility could increase as the major indexes are almost traded in the bear market territories.

“On the local front, we expect the spillover of negative trading tone from Wall Street overnight.

“Also, with the Brent crude oil prices trading significantly below US$70 (Budget 2019’s assumption), traders may take the opportunity to further reduce exposure within oil and gas sector.

“Nevertheless, the potential window dressing activities that may emerge in the month of December could lend some support on KLCI, limiting the near term downside risk around 1,620-1,630,” it said.