Market Close: KLCI falls 0.4% on US, Malaysian budget concerns

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KUALA LUMPUR (Sept 30): The FBM KLCI reduced losses to finish 7.54 points or 0.4% lower in volatile trade. Analysts said this came on concerns about the US government's finances. Back home, anticipation of the Malaysia's 2014 Budget and UMNO election this month has also dictated market sentiment.
At 5pm, the KLCI settled at 1,768.62 points. This came on losses in stocks like CIMB Group Holdings Bhd and Axiata Group Bhd.
"Technically, the KLCI and US stock markets are consolidating," Kenanga Investment Bank Bhd research head Chan Ken Yew told over telephone.
Earlier today, Kenanga had written in a note that crucial issues in the Malaysian budget this October 25 may include the goods and services tax, and subsidy cuts.
The UMNO election is also closely watched. Kenanga said investors may not be comfortable taking major position in the stock market ahead of the event.
"Although there is no competition for the top two positions, the six contenders for the three VP UMNO posts will likely decide the next in line for the ruling party before the GE14 which is due in five years’ time," Kenanga said.
Today, Bursa Malaysia saw 1.85 billion shares worth RM2.38 billion changed hands. There were 227 gainers versus 558 decliners.
The top gainer was British American Tobacco (M) Bhd while Aeon Credit Service (M) Bhd led decliners. The most-active entity was The Media Shoppe Bhd.
Across Asia, Japan's Nikkei fell 2.06% while Hong Kong's Hang Seng declined 1.5%. Nearer to home, Singapore's Straits Times dropped 1.03%
Reuters reported that in the US, it seemed increasingly unlikely that Republicans and Democrats could reach a deal on funding the government before the fiscal year ends at midnight on Monday.
If so, many government employees will be furloughed and the Labour Department will not issue its monthly employment report scheduled for Friday.
Markets in mainland China will be closed from October 1 to 7 for the National Day holiday. The Hong Kong market will be closed tomorrow (October 1).