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KUALA LUMPUR (May 14): The FBM KLCI reversed its previous gains and fell below the 1,400 level as of mid-morning today, as the breadth of the market turned negative as global economic risks and the extent of Covid-19 epidemic reoccupied.
At 10 a.m., the FBM KLCI lost 8.24 points to 1,388.89. The index had previously risen to a high of 1,411.08.
The losers led the winners 532 to 173, while 291 counters were swapped unchanged. The trading volume was 2.07 billion shares valued at RM1.13 billion.
The main losers were Dutch Lady Milk Industries Bhd, Nestle (M) Bhd, Ajinomoto (M) Bhd, PPB Group Bhd, Heineken Malaysia Bhd, Panasonic Manufacturing Malaysia Bhd, British American Tobacco (M) Bhd, Aeon Credit Service (M) Bhd , Rubberex Corp Bhd and Malaysia Airports Holdings Bhd.
Assets included Minetech Resources Bhd, Green Packet Bhd, Key Alliance Group Bhd, XOX Bhd, QES Group Bhd, Notion VTec Bhd, Careplus Group Bhd, and JAG Bhd.
Winners included Top Glove Corp Bhd, Favelle Favco Bhd, Hartalega Holdings Bhd, United Plantations Bhd, Supermax Corp Bhd, IHH Healthcare Bhd and Petronas Gas Bhd.
Bloomberg said Asian stocks were pulled after US Federal Reserve Chairman Jerome Powell warned of economic risks and big-name investors raised doubts about the valuations.
Treasury bonds had gains, he said.
Hong Leong IB Research said that following the recent three-day decline of 1,083 points in the Dow, local sentiment is likely to be cautious.
After a 15.6% relief rebound from the 1,208 low on March 19, the KLCI may experience some degree of profit taking (with key supports at 1,350-1,370), ahead of the current reporting season, concerns by the conflict between the United States and China and the second wave of coronavirus infections along with Powell’s bearish view on the economic outlook for the United States, which is “highly uncertain and subject to significant negative risks,” the research house said. .
“On local stocks, we believe yesterday’s upward move has sent glove makers to their respective levels of overbought and valuable valuations, and therefore a pullback in profit-taking may be just around the corner “, said.
