FBM KLCI starts lower as investors weigh Brexit outlook

KUALA LUMPUR (Oct 23): The FBM KLCI opened lower with Asian shares today after UK lawmakers rejected the government’s planned timetable for passing legislation to ratify its European Union (EU) exit deal.

At 9am, the KLCI opened down 2.14 points at 1,571.95. At 9:08am, the index fell 0.86 point to 1,573.23.

Hong Leong Investment Bank Bhd wrote in a note today Malaysia’s Budget 2020 sentiment and US-China trade talks optimism are, however, expected to support Malaysian shares.

“We expect improved sentiment from the Budget 2020 as well as the ongoing trade talks optimism would be able to sustain the positive trading tone among small caps and lower liners on the local front.

“However, the upside may be capped along the way in view of a slightly muted November reporting season. Hence, the KLCI (is) likely to stay within 1,560-1,580,” Hong Leong wrote in a note today.

Asian share markets fell today after US equities’ Tuesday overnight drop.

Reuters reported that US stocks ended lower on Tuesday, giving up early gains after British lawmakers rejected the government’s proposed timetable for passing legislation to ratify its deal to exit the EU.

It was reported that the the Dow Jones Industrial Average fell 39.54 points, or 0.15%, to 26,788.1, the S&P 500 lost 10.73 points, or 0.36%, to 2,995.99 and the Nasdaq Composite dropped 58.69 points, or 0.72%, to 8,104.30.

“The defeat in parliament made it unlikely that Britain would finalise its exit by Prime Minister Boris Johnson’s Oct 31 target. Johnson said it was up to the EU to decide whether it wanted to delay Brexit and for how long.Though the Brexit complications have had limited impact on US markets, they have contributed to investors’ uncertainties about global financial and economic conditions, strategists said,” Reuters reported.

Source: TheEdgeMarkets