KUALA LUMPUR (Aug 6): The FBM KLCI slumped 1.10% in early trade this morning, tracking the regional plunge after Washington designated Beijing a currency manipulator.

At 9.05am, the FBM KLCI lost 17.56 points to 1,592.85.

The top losers included Fraser & Neave Holdings Bhd, Nestle (M) Bhd, PPB Group Bhd, Aeon Credit Service (M) Bhd, Carlsberg Brewery Malaysia Bhd, Hong Leong Bank Bhd, Kuala Lumpur Kepong Bhd, Malaysia Airports Holdings Bhd, Public Bank Bhd and Hong Leong Financial Group Bhd.

Asian stocks plunged again on Tuesday and American futures slumped after the U.S. slapped the currency-manipulator tag on China, further escalating the trade war between the world’s two largest economies. The yuan slid in offshore trading and the yen climbed, according to Bloomberg.

The MSCI Asia Pacific Index dropped more than 1%, bringing its sell-off over the past week to about 6%, after the biggest drop of the year in U.S. stocks on Monday. The rally in sovereign bonds continued, sending 10-year Treasury yields to the lowest since October 2016, Australian ones to record levels and Japanese rates below the central bank’s target range. More than $700 billion was wiped from the value of U.S. equities on Monday, with all but 11 members of the S&P 500 Index falling. Oil dropped toward $54 a barrel, it said.

CGSCIMB Retail Research said the FBMKLCI index lost another 16 points on the first trading day of the week as market sentiment was dented by the renewed escalation of the US-China trade war.

It said the overnight Wall Street slump could potentially lead to a gap-down move in the local barometer today.

“With the August reporting month looming, trading is expected to be cautious at best.

“Please mind the gap! A decisive break below 1,600 would send the index down towards the 1,572-1,590 levels next.

“While the technical outlook for the market remains sluggish, any positive news coming from the trade disputes is likely to trigger a significant rebound. Resistance: 1,620 & 1,640. Support: 1,600 & 1,572,” it said.