KUALA LUMPUR (July 2): The FBM KLCI extended its gains in early trade this morning, but the advance could be capped by news of additional US tariffs on European Union goods.

At 9.10am, the FBM KLCI added 1.81 points to 1,685.43.

The early gainers included Nestle (M) Bhd, Fraser & Neave Holdings Bhd, Petronas Dagangan Bhd, Rapid Synergy Bhd, G3 Global Bhd, British American Tobacco (M) Bhd, Westports Holdings Bhd, Hong Leong Financial Group Bhd and RHB Bank Bhd.

U.S. stock futures retreated after news that the U.S. is considering adding more tariffs to $4 billion of European Union goods, dimming the optimism about global trade from the U.S.-China truce just three days ago. The yen edged up, according to Bloomberg.

Futures on S&P 500 Index fell as much as 0.3%. That’s after U.S. stocks hit an all-time high on Monday, when chipmakers led the rally. The fresh trade worries come as economic data show warning signs: a U.S. manufacturing gauge showed orders stalled last month. The 10-year Treasury yield edged up Monday, though futures traders still priced in almost 75 basis points of interest-rate cuts this year by the Federal Reserve. The dollar pushed higher and gold declined, it said.

Kenanga IB Research said following the US-China truce at the G-20 summit, most Asian markets rallied yesterday with the FBM KLCI gaining 11.5 points (0.69%) to end at 1,683.6.

It said that from a technical viewpoint, the index seemed to be consolidating, having formed small candles for five consecutive days.

“Nevertheless, the trend seemed bullish as the index has broken above the key SMAs recently.

“Resistance can be found at 1,690 (R1); a break above should see the index trend higher towards 1,730 (R2). Conversely, downside supports can be identified at 1,650 (S1) and 1,600 (S2),” it said.