KLCI trails healthcare gauge drop as Covid-19-driven MCO hits sentiment

KUALA LUMPUR (May 6): The FBM KLCI fell more than 1% in morning trade on Bursa Malaysia today on broad-based selling as investors weighed factors including the economic impact of the re-enforcement of the movement control order (MCO 3.0) at several places to curb the spread of the Covid-19 pandemic.

At 10.15am, the KLCI had fallen 16.52 points or 1.05% to 1,559.15, while Bursa’s Health Care Index dropped the most after falling 4.25% as rubber glove manufacturers emerged among the top decliners on the local bourse.

“The recent profit-taking correction should persist pending further clarity of the effectiveness of current MCO restrictions, or any potential stimulus to spark an oversold rebound ahead, while oil and gas (O&G) related stocks extend their recovery, backed by a firm global oil price trend,” TA Securities Holdings Bhd analysts wrote in a note today.

“[Yesterday,] the KLCI shed 12.58 points to settle near session lows at 1,575.67, off an early high of 1,592.18, as losers swarmed gainers 811 to 299 on a total turnover of 7.37 billion shares worth RM4.24 billion,” they said.

Hong Leong Investment Bank Bhd (HLIB) analyst Ng Jun Sheng wrote in a note today HLIB expects the Malaysian stock market to remain jittery during the current corporate financial reporting season in May as investors weigh the “economic impact of a prolonged MCO due to the gravity of the local Covid-19 situation”.

“Wild swings [are expected] ahead as MCO and virus jitters curb recovery optimism,” Ng added.

Source: TheEdgeMarkets