KLCI reverses loss as trading volume surges to 9 billion, regional markets stall

KLCI reverses loss as trading volume surges to 9 billion, regional markets stall
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KUALA LUMPUR (Dec 7): The main index at Bursa Malaysia reversed its earlier loss and climbed at midday break, while regional markets stalled.

At 12.30pm, the FBM KLCI was up 0.66 points to 1,622.51. The index had earlier slipped to a low of 1,618.98.

Gainers led losers by 456 to 362, while 862 counters traded unchanged. Trading volume was 9.59 billion shares valued at 4.05 billion.

The gainers included British American Tobacco (M) Bhd, Dutch Lady Milk Industries Bhd, Hengyuan Refining Company Bhd, Petron Malaysia Refining & Marketing Bhd, Heineken Malaysia Bhd, Malaysia Airports Holdings Bhd, IOI Property Group Bhd and UWC Bhd.

The actively traded stocks included Yong Tai Bhd, Sapura Energy Bhd, XOX Bhd, Hiap Teck Venture Bhd, Kanger International Bhd and Sanichi Technology Bhd.

The decliners included Nestle (M) Bhd, KESM Industries Bhd, PPB Group Bhd, Supermax Corp Bhd, Kossan Rubber Industries Bhd, Pharmaniaga Bhd and United Malacca Bhd.

Reuters said Asian shares retreated from a record peak on Monday after the newswire report the United States was preparing to impose sanctions on some Chinese officials highlighted geopolitical tensions, while oil prices fell on surging virus cases.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.3% following four straight sessions of gains, it said.

Hong Leong IB Research said following a powerful technical breakout above the much-awaited 1,618 neckline resistance last week, KLCI is ripe for further profit-taking consolidation, given the overbought momentum (+170 points from the Nov 2 low of 1,452) and concerns over the huge amount of global economic uncertainty created by Covid-19 despite vaccines’ optimism, expectations of weaker 4Q20 economy in Malaysia (post-CMCO 2.0), coupled with possible knee-jerk selldown after Fitch downgraded Malaysia’s sovereign credit rating to "BBB+" from "A-" last Friday.

“Nevertheless, we believe the traditional December window dressing (average +3.8% return from 1990-2019 with an 87% successful hit rates) and continued shift from pandemic-themed to recovery-focused beneficiaries may cushion downside near 1,592 (uptrend line support from 1,452) and 1,562 (Nov 30 low),” it said.