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KLCI tracks regional markets, dips as blue chips drag

KUALA LUMPUR (May 13): The FBM KLCI followed suit with regional markets and retreated marginally, dragged by select index-linked blue chips.

At 9.10am, the FBM KLCI shed 1.05 points to 1,609.22.

The decliners included Nestle (M) Bhd, British American Tobacco (M) Bhd, Hong Leong Bank Bhd, Petronas Dagangan Bhd, Kuala Lumpur Kepomg Bhd, Sime Darby Plantation Bhd, RHB Bank Bhd, IHH Healthcare Bhd, MISC Bhd and UMW Holdings Bhd.

Stocks in Asia fell with U.S. equity futures, while the yen and Treasuries climbed, after trade talks ended without a resolution and China said the U.S. must remove all extra tariffs. The yuan retreated, according to Bloomberg.

The heightened tensions over the weekend unwound gains in risk assets from late Friday as optimism over progress between the two sides faded. Shares in Japan and South Korea opened lower and S&P 500 Index futures dropped 1.1%. Moves in currencies extended early Monday and Treasury yields retreated as trading began. Hong Kong is closed Monday for a holiday, it said.

Kenanga IB Research Asian markets ended mostly higher last Friday, despite US tariffs kicking in as investors grew hopeful that US and China would carve out a trade deal.

However, it said back home, the FBM KLCI fell 8.26 points or 0.51% to end at 1610.27, bringing week-on-week loss to -1.65%.

“We observed that the index has been in a consolidation phase for the past few weeks and that the primary downtrend of the index is still intact as all shorter-term SMAs are trading below longer-term SMAs.

“However, the recently announced rate cut by BNM could be the much-needed catalyst to spur the market.

“Should the index break above the 100-day SMA (1,667), this could be an early sign of a potential reversal. We look towards 1,640 (R1) as an immediate resistance, where a break above would see it head towards 1,660 (R2) level, while on the downside, support levels can be identified at 1,600 (S1) and 1,570 (S2),” it said.

Source: TheEdgeMarkets