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KUALA LUMPUR: FBM KLCI ended Monday on a negative note, its third straight day of losses as profit-taking continued ahead of the year-end holiday season and fears of a new strain of coronavirus threatened prospects for global recovery.
At 5pm, the key index closed 4.6 points lower at 1,647.89, having lost more than 10 points earlier in the day.
The trading volume was 8,090 million shares valued at RM3.67bil. Market breadth was negative with 848 declines compared to 394 winners.
An analyst who spoke to StarBiz said that profit taking in recent days was due to declining liquidity ahead of the upcoming holidays, especially after a strong rally in November.
Meanwhile, he believes that the euphoria surrounding the launch of the Covid-19 vaccines could have been discounted in the short term.
“Data for November and December are beginning to reflect the recent increase in Covid-19 cases and the impact of targeted lockdown re-implementation,” he added.
Over the next two days, the price action in the market could signal bullish investor sentiment as seen during the 2018 year-end rally.
“While investors turned positive in 2018 due to the Fed’s dovish turn on interest rates, market participants could be equally buoyed by the $ 900 billion US fiscal stimulus this time around.
“On the other hand, given already high stock prices, market players could remain on the sidelines until the first half of 2021,” he said.
Bank stocks, which have been a driver of the market rally earlier in the week, were mixed amid the broader pullback.
Maybank rose two sen to RM8.48, Public Bank rose two sen to RM20.66, CIMB fell eight sen to RM4.30, and Hong Leong Bank held steady at RM18.58.
Global stocks were also seen stumbling on news that the UK and other parts of Europe could face new lockdown measures following the discovery of a rapidly spreading strain of coronavirus.
The prospect of further economic closures countered the news that the US authorities had agreed on a $ 900 billion aid package, resulting in mixed results in Asian markets.
The MSCI Asia Pacific Stock Index excluding Japan fell 0.2% after hitting new successive highs last week.
In Japan, the Nikkei fell 0.4% to break out of a nearly 30-year high, while South Korea’s Kospi managed to maintain a 0.2% lead.
China’s benchmark index closed 0.8% higher and Hong Kong’s Hang Seng fell 0.7%. Australia’s ASX 200 ended down just 0.1%.
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