KLCI reverses gains as manufacturing data dips

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KUALA LUMPUR (Nov 1): The FBM KLCI reversed its earlier gains and fell at mid-morning after Malaysia's manufacturing data dipped below 50.0 to 49.2 in October from 51.5 in September, indicating a mild rate of contraction in Malaysia's goods-producing sector.

IHS Markit this morning said the deterioration in Malaysia's operating conditions was largely driven by a marked reduction in total new sales.

It said demand eased noticeably in October, with weakness arising from domestic markets and the recently-implemented sales and service tax.

At 10am, the FBM KLCI fell 5.07 points to 1,704.20. The index had earlier risen to a high of 1,711.39.

Losers edged gainers by 240 to 236, while 238 counters traded unchanged. Volume was 506.33 million shares valued at RM270.51 million.

The decliners included Nestle (M) Bhd, British American Tobacco (M) Bhd, Top Glove Corp Bhd, Petronas Dagangan Bhd and Malaysia-listed Hang Seng Index-linked put warrants.

The actives included Hibiscus Petroleum Bhd, Seacera Group Bhd, My EG Services Bhd, Prestariang Bhd, Sapura Energy Bhd, Orion IXL Bhd and Frontken Corp Bhd.

The gainers included United Plantations Bhd, Perusahaan Sadur Timah Malaysia (Perstima) Bhd, Petronas Gas Bhd, KESM Industries Bhd, Apex Healthcare Bhd, Carlsberg Brewery Malaysia Bhd, Heineken Malaysia Bhd, Pentamaster Corp Bhd and Hai-O Enterprise Bhd.

Asian stocks rose on Thursday as bruised investor sentiment got some relief from another robust Wall Street session thanks to upbeat corporate earnings, while the US dollar hovered near a 16-month high on further signs of strength in the world's largest economy, according to Reuters.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.15%, adding to modest gains the previous day, though this came after a brutal October month, it said.

Hong Leong IB Research in a traders' brief said this rebound would be short-lived given the few upcoming major events such as mid-term US presidential election and the meeting between US President Trump and Chinese President Xi this month, which could provide heightened volatility and downside risk towards the stock markets.

"Tracking the performance on overnight Wall Street, buying interest may sustain on the local front, lifting the KLCI higher.

"However, upside could be capped as profit-taking activities may emerge ahead of the 'belt-tightening mode' Budget 2019.

"Hence, KLCI's trading range likely to be capped between 1,690-1,730," it said.