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This article first appeared in The Edge Financial Daily on January 8, 2019

KUALA LUMPUR: Any news on the outcome of the Sino-US trade talks in Beijing, which is expected to conclude today, will dictate the world markets, at least in the following few days.

The two-day trade talks began yesterday slightly more than a month after the two countries’ leaders agreed on the 90-day truce on Dec 1.

While all eyes are on its outcome, some bargain hunting has emerged — picking up stocks that have been bogged down sharply amid the spillover improved sentiment from the US.

However, it is too soon to conclude blue skies ahead, said Areca Capital chief executive officer Danny Wong Teck Meng as he expects volatility to persist. “We think the market will remain volatile until there is a clearer picture of the trade war, which is a major issue,” he said.

Most Asian markets closed higher, including Bursa Malaysia yesterday with the Tokyo bourse leading the pack. The Nikkei 225 was up 2.44% to 20,038.97 points; the Shanghai Composite Index closed up 0.72% to 2,533.09 points; Hong Kong’s Hang Seng Index was up 0.82% to 25,835.7 and South Korea’s Kospi was up 1.34% to 2,037.1 points. Closer to home, the Singapore Straits Times Index was up 1.4% to 3,102.8 points and the Jakarta Composite Index was up 0.2% to 6,287.22 points.

Over at Bursa, the benchmark FBM KLCI gained 9.39 points or 0.56% to 1,679.17 points yesterday, its best performance so far this year on stronger buying power, supported by blue chips such as AMMB Holdings Bhd (up 5.5% to RM4.58), Sime Darby Plantation Bhd (up 4.1% to RM5) and Tenaga Nasional Bhd (up 3.6% to RM13.94). Across the board, gainers outweighed losers, with 541 counters closing up, 264 down and 429 remaining unchanged.

Areca Capital’s Wong attributed the better performance of the local stock market to a stronger showing from US equities following the jobs report released last Friday. “On Bursa Malaysia, tech stocks were bashed down [last week], more than they should have, on weaker sentiment due to the cut in Apple Inc’s sales forecast. Some of these counters saw a rebound yesterday on bargain hunting activities,” he told The Edge Financial Daily.

Among the tech counters that took a turn for their better yesterday were KESM Industries Bhd (up 10.7% to RM8.25), Pentamaster Corp Bhd (up 13.8% to RM2.64), Malaysian Pacific Industries Bhd (up 1.97% to RM9.84), Inari Amertron Bhd (up 8.1% to RM1.33) and ViTrox Corp Bhd (up 2.1% to RM5.88). Investors are also hoping for some light to be shed on the US-China trade war,” said Wong.

According to Reuters, China’s foreign ministry said it has “good faith” to work with the US to resolve trade frictions, as officials from the two largest economies meet in Beijing this week to resume trade talks — the first since the 90-day trade war truce that commenced on Dec 1.

Higher oil prices, with Brent crude oil prices up to US$58 (RM238.65) per barrel from US$54 on Jan 2. The ringgit also saw a slight improvement, at 4.11 to the US dollar, compared with 4.13 last Friday.

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