KLCI reverses earlier gains, drifts lower in line with region

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KUALA LUMPUR (Sept 30): The FBM KLCI reversed its earlier gains and drifted lower at mid-morning today, tracking regional markets.

At 10am, the FBM KLCI dipped 0.3 points to 1,583.84. The index had earlier risen to a high of 1,585.42.

Losers outpaced gainers by 284 to 179, while 250 counters traded unchanged. Volume was 427.6 million shares valued at RM167.09 million.

The top losers included Asia Brands Bhd, PRG Holdings Bhd, Timberwell Bhd, UMW Holdings Bhd, Latitude Tree Holdings Bhd, Lotte Chemical Titan Holding Bhd, Telekom Malaysia Bhd, Muar Ban Lee Group Bhd and Pasdec Holdings Bhd.

The actives included Eduspec Holdings Bhd, Bumi Armada Bhd, Sapura Energy Bhd, Green Packet Bhd, Sealink International Bhd and Berjaya Corp Bhd.

The gainers included Hong Leong Financial Group Bhd, Pentamaster Corp Bhd, Petronas Dagangan Bhd, Gamuda Bhd, Aeon Credit Service (M) Bhd, Spritzer Bhd, MISC Bhd and G3 Global Bhd.

Asian shares and the Chinese yuan were off to a cautious start on Monday as investors looked to how Chinese financial markets will react to the news the US administration is considering delisting Chinese companies from US stock exchanges, according to Reuters.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.11% while Japan's Nikkei shed 0.61%. US stock futures gained 0.24% in early trade, paring back almost a half of Friday's 0.53% fall in the index, it said.

Hong Leong IB Research maintained its view that the Dow will continue to trend in range bound mode (26,400-27,400 zones) in the near term as investors digest the divided views on the next course of actions by the US Federal Reserve in the Oct 30-31 and Dec 10-11 Federal Open Market Committee meetings, as well as closely monitor the upcoming US-China trade talks on Oct 10-11.

It said in addition, traders will be shifting their attention towards the upcoming US 3Q19 reporting season in mid-October (consensus is predicting the S&P 500 earnings to decline 4.8% year-on-year from a flat performance in 1Q and 2Q).

"Despite potential end-September window-dressing activities today after tumbling 88 points or 5.3% since end June, KLCI is still susceptible for more choppiness ahead amid uncertain outlook as Malaysian government bonds are still on the Watch List for potential downgrade in the WGBI (World Government Bond Index) (pending the next review in March 2020).

"Moreover, sentiment remains cautious as investors await the crucial US-China trade talks on Oct 10-11 and the tabling of Budget 2020 on Oct 11. KLCI is likely to engage in sideways trading around 1,571-1,595 zones," it said.