KLCI slips 0.34% on regional negativity, ringgit uncertainty

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KUALA LUMPUR (June 8): The FBM KLCI benchmark index tracks the regional market’s negative sentiments today, and a weaker ringgit, to close in the red.

At 5pm, it was down 5.88 points or 0.34% at 1,739.45. The index had earlier fallen to a low of 1,727.01 points.

The main laggards were British American Tobacco Malaysia Bhd, Kuala Lumpur Kepong Bhd, Hong Leong Financial Group Bhd and the KLCCP Stapled Group.

"It was within expectations that the KLCI would close lower today as the market was generally still anticipating the US Federal Reserve interest rate hike," Affin Hwang Investment Bank Bhd vice president and head of retail research Datuk Dr Nazri Khan told theedgemarkets.com over the phone.

"On top of that, the uncertainty of the ringgit Malaysia and the current political development have also further dampened market sentiment," he added.

Thus, he advised investors to stand aside until the market bottoms out, which he expects to happen between the range of 1,680 points and 1,650 points.

"Going forward, the ringgit's direction plays a significant role in the domestic market’s performance," he added.

Across Bursa Malaysia, losers outpaced gainers by almost twice as much at 532 against 254, while 308 counters remained unchanged. About 1.239 billion shares valued at RM1.382 billion were done throughout the day.

The most actively traded stocks included Xinghe Holdings Bhd, Hubline Bhd and K-One Technology Bhd.

The top gainers included Panasonic Malaysia Manufacturing Bhd, Dutch Lady Milk Industries Bhd, Lysaght Galvanised Steel Bhd and LTKM Bhd.

In the currencies market, the greenback gained on the ringgit as US posted a strong jobs data on last Friday (June 5).

The ringgit dropped to a nine-year low versus the US dollar, weakening to as low as 3.7725 against the US dollar, as the dollar strengthened on better US nonfarm payrolls data. At the point of writing, it was at 3.7705, up 1.38%.

The stronger US dollar also did not bode well for the commodities market. The benchmark Brent Crude Oil index slid 0.41% at US$63.05 per barrel, while West Texas Intermediate (WTI) index declined 0.64% to trade at US$58.75 per barrel.

Across Asia, market sentiment was generally bearish, with Japan's Nikkei 225 down 0.02% or 3.71 points at 20,457.19 points, while South Korea's Kospi retreated 2.91 points or 0.14% to 2,065.19 points.

Hong Kong's Hang Seng bucked the trend and inched up 56.12 points or 0.21% to close at 27,316.28 points.

Reuters reported that Asian shares extended losses on Monday as weak Chinese imports increased concerns over a slowdown in the world's second largest economy, while the dollar was steady after US jobs data raised chances for a US interest rate hike as early as September.