KLCI slides as ECB downgrade, China export slump hit Asian shares

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KUALA LUMPUR (March 8): The FBM KLCI closed 7.05 points or 0.42% lower at 1,679.9 after news on China's export slump and European Central Bank's (ECB) euro zone economic growth and inflation forecast downgrade hit Asian share markets.

In China, the Shanghai Stock Exchange Composite closed down 4.4% while Hong Kong's Hang Seng fell 1.91%. Elsewhere across Asia, Japan's Nikkei 225 closed down 2.01% while South Korea's Kospi fell 1.31%.

Asian shares took cue today from US equities' overnight drop on Thursday. The Dow Jones Industrial Average closed down 0.78%, the S&P 500 lost 0.81% while the Nasdaq Composite fell 1.13%.

Reuters reported that Wall Street's main indexes fell for a fourth consecutive session on Thursday, after Europe's central bank said it would defer interest rate hikes and offered banks a new round of cheap loans, raising fresh concerns about global economic growth. It was reported that the ECB slashed its growth and inflation forecasts for 2019 and lowered those for 2020 and 2021 on Thursday, acknowledging that Europe's slowdown was longer and deeper than earlier thought.

Today, it was reported that Asian stocks shuddered lower on Friday after shockingly weak export data from China heightened market fears about a global economic slowdown, a day after European policymakers slashed growth forecasts for the bloc.
It was reported that Beijing reported exports in February tumbled 20.7 percent from a year earlier, far beneath forecasts of a 4.8 percent drop and more than erasing January's surprise jump.

In Malaysia, Malacca Securities Sdn Bhd senior analyst Kenneth Leong concurred that the ECB’s downgrade caused a spiralling effect across global markets, from which Malaysia took cue.

“The KLCI resumed its slide today, taking cue from weakness in Wall Street overnight. (The KLCI's) Weakness is also in line with negative performance across the (Asia) region,” said Leong.

Across Bursa Malaysia, 2.61 billion shares were traded for RM2.22 billion. Top decliners included KLCI stocks Nestlé (M) Bhd and Petronas Gas Bhd.

The most-actively traded counter was Dayang Enterprise Holdings Bhd, which saw some 93 million shares transacted. Dayang closed 18 sen up at RM1.58.