KLCI slumps on US rate hike talk; IOI Corp falls

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KUALA LUMPUR (March 25): The FBM KLCI fell 11.74 points or 0.7% as US interest rate hike anticipation continued to hit sentiment. US rate hikes do not bode well for Asian markets on expectation that funds will flow back to US dollar-based assets.

At 5pm, the KLCI closed at 1,703.79 points as IOI Corp Bhd and SapuraKencana Petroleum Bhd shares declined. The KLCI cut losses from its lowest intra-day point at 1,699.76.

IOI Corp shares fell 18 sen to close at RM4.65 with some 26 million units traded. IOI Corp has been closely watched as the Roundtable on Sustainable Palm Oil (RSPO) is reviewing the company's certification.

According to a Bloomberg report, the RSPO alleged that IOI Corp had not complied with RSPO's rules.

SapuraKencana shares fell nine sen to close at RM1.91 after the company reported a RM1.29 billion net loss in the fourth quarter ended Jan 31, 2016 compared to a net profit of RM129.13 million a year earlier.

Full-year net loss stood at RM791.56 million versus a net profit of RM1.43 billion a year earlier.

Etiqa Insurance & Takaful research head Chris Eng told theedgemarkets.com that other than IOI Corp and SapuraKencana, the KLCI fell on local institutional selling.

"Foreign funds were not aggressively buying while the local funds continued selling," Eng said.

Bloomberg reported that the prospect of higher US interest rates is returning to the spotlight, as regional Federal Reserve presidents indicated support for higher rates as soon as economic data warrant.

Across Bursa Malaysia, decliners outnumbered gainers at 465 to 295. A total of 1.43 billion shares worth RM1.15 billion changed hands.

Panasonic Manufacturing Malaysia Bhd was the top gainer while KNM Group Bhd was among the most-actively traded stocks.

Across Asian share markets, Japan's Nikkei 225 rose 0.65% while South Korea's Kospi declined 0.11%. US, Hong Kong and Australia markets are closed today for the Good Friday holiday.

Hong Kong and Australia markets will also be closed this Monday (March 28) for the Easter holiday.