KUALA LUMPUR (April 21): The FBM KLCI succumbed to selling pressure in early trade Tuesday and fell 0.88%, following the overnight fall at Wall Street after the historic plunge of crude oil prices to below zero.
Crude oil prices rebounded Tuesday, but still were trading at just US$0.50 a barrel at 8:31 a.m. Singapore time.
At 9.05am, the FBM KLCI lost 12.39 points to 1,400.83.
The top losers in early trade included Heineken Brewery Malaysia Bhd, Carlsberg Brewery Malaysia Bhd, Petronas Dagangan Bhd, Dutch Lady Milk Industries Bhd, British American Tobacco (M) Bhd, Petronas Gas Bhd, Petron Malaysia Refining & Marketing Bhd, Panasonic Manufacturing Malaysia Bhd, Hap Seng Consolidated Bhd and Petronas Chemicals Group Bhd.
Bloomberg said Asian stocks followed their U.S. counterparts lower, with investors on edge as oil futures plunged to unprecedented levels and earnings season continued.
Equities opened lower in Japan, Australia and South Korea. S&P 500 futures edged higher after U.S. stocks fell from six-week highs. West Texas crude futures expiring Tuesday turned negative for the first time, primarily because the end of the May contract forces physical receipt at a time when storage capacity is low. June prices fell below $22 a barrel. Yields on 10-year Treasuries were steady around 0.61% after dropping more than three basis points, it said.
Rakuten Trade said that the correction that it has been anticipating should happen today.
In its daily market report this morning, Rakuten said with crude oil doing something unprecedented where its May futures went negative, Covid-19 in the US remains unrelenting.
“As such, we expect regional markets to experience some selling across the board today.
“The FBM KLCI which have had surprised many of late will see some downside pressure today with immediate support level at the 1,400 mark.
“Though trading opportunities still prevails we still advise investors to exercise caution,” it said.
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