KLCI reverses gains as Malaysia PMI falls to 3-month low

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KUALA LUMPUR (April 1): The FBM KLCI reversed its earlier gains and fell 0.51% at mid-morning today, after Malaysia's Nikkei Manufacturing Purchasing Managers' Index (PMI) deteriorated to a three-month low of 47.2 in March 2019, signalling a worsening of business conditions in contrast with its Asean neighbours.

This marked a rapid decline of the country's index figure from 49.6 in February this year. It is also the lowest PMI to be recorded for Malaysia since it fell to 46.8 in December last year.

At 10am, the FBM KLCI lost 8.26 points to 1,635.37. The index had earlier risen to a high of 1,647.59.

Gainers led losers by 250 to 226, while 304 counters traded unchanged. Volume was 704.39 million shares valued at RM276.23 million.

The top losers included Public Bank Bhd, Hong Leong Bank Bhd, Panasonic Manufacturing Malaysia Bhd, Enra Group Bhd, APM Automotive Holdings Bhd, British American Tobacco (M) Bhd, Hong Leong Financial Group Bhd, Tenaga Nasional Bhd and Kia Lim Bhd.

The actives included GETS Global Bhd, Bumi Armada Bhd, Pintaras Jaya Bhd, Sapura Energy Bhd and Sino Hua-An International Bhd.

The gainers included Tasek Corp Bhd, Fraser & Neave Holdings Bhd, Syarikat Takaful Malaysia Keluarga Bhd, Petronas Dagangan Bhd and Carlsberg Brewery Malaysia Bhd.

Asian stocks rose on Monday, as signs of progress in US-China trade talks and firmer Wall Street shares supported sentiment, although another defeat for British Prime Minister Theresa May's proposed Brexit deal added to the pound's recent woes, according to Reuters.

The markets also took heart after data released on Sunday showed factory activity in China unexpectedly grew for the first time in four months in March, suggesting government stimulus measures may be starting to have an impact, it said.

Hong Leong IB Research said that on Wall Street, traders will be focusing on the trade developments between the US and China with the surfacing of positive comments from the US officials.

"Nevertheless, market participants will also monitor the status of the inverted yield curve as it is likely to be signalling a potential recession in the future.

"Hence, the Dow's upside could be capped around 26,000-26,343," it said.

On the FBM KLCI, the research house said with the slight optimism on trade developments, the positive buyer support may spill over towards stocks on the local front.

"Also, with the firmer crude oil prices, coupled with recovering sentiment on construction sector on the back of a potential revival of most of the BN-era projects after renegotiations (commented by Lim Guan Eng) moving forward, we expect oil and gas and construction stocks will be actively traded this week," it said.