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KUALA LUMPUR (Sep 10): FBM KLCI fell 0.44%, dragged down by continued sell-off from glove makers, while Malaysian shares fell as investors took in Bank Negara Malaysia’s decision to keep your policy interest rate at 1.75%.
After taking the example of the nightly rally on Wall Street to open at its intraday high of 1,504.03 points, the benchmark fell back mid-morning and remained in the red to close 6.6 points at 1,490.12 points.
The largest declines for KLCI were Hartalega Holdings Bhd (down RM1.12 or 8.62% to RM11.88), Top Glove Corp Bhd (down 70 sen or 9.79% to RM6.45) and Petronas Dagangan Bhd (down 40 sin or 1.89% at RM20.78).
In the rest of Asia, Japan’s Nikkei 225 gained 0.88%, South Korea’s Kospi rose 0.87% while Hong Kong’s Hang Seng Index fell 0.64%.
The Central Bank of Malaysia announced today at 3:00 p.m. that it will maintain the overnight policy rate (OPR) at 1.75%. The street consensus had been divided, with half of the research houses expecting another 25 basis point cut, as the nation is still reeling from the COVID-19-induced recession.
“The 125 basis point cumulative reduction in this year’s OPR will continue to provide a stimulus to the economy,” BNM said in a statement.
“Given the growth and inflation outlook, the Monetary Policy Council considers that the monetary policy stance is appropriate and accommodative,” he added.
A senior market analyst opined that the decision also contributed to the current negative market sentiment in Bursa Malaysia.
“People on the street are seeing it difficult. The Central Bank can keep the OPR unchanged before the next FTSE Russell review of the World Government Bond Index to maintain the inclusion of our Government bonds, ”said the analyst.
“There is still another MPC meeting in November to consider,” the analyst added.
Across the broader area of Bursa Malaysia, market amplitude was negative with 1,023 declines against 200 winners, while 293 accountants were unchanged. The FBM Emas Index fell 1.09%, while the ACE Index fell 5.39% steeper.
The total volume stood at 8.4 billion shares, with a total turnover of RM5.49 billion.
Glove manufacturers emerged as the top declining leaders led by Supermax Corp Bhd (down RM1.38 or 18.45% to RM6.10), Kossan Rubber Industries Bhd (down RM1.26 or 11.5% to RM9.70) and Hartalega.
The winners were led by Kuala Lumpur Kepong Bhd (up 58 sen or 2.59% to RM22.90), Time DotCom Bhd (up 58 sen or 2.6% to RM11.72) and Tenaga Nasional Bhd (up 32 sen or 2.86% to RM11 50) and PPB Group Bhd.
The main active accountants were XOX Bhd, Pegasus Heights Bhd and Top Glove.
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