KUALA LUMPUR (Jan 5): The main index of Bursa Malaysia dipped below the crucial 1,600-point level in the mid-morning today as market breadth turned tepid in line with lower regional markets.

At 10am, the FBM KLCI fell 5.74 points to 1,596.82.

Market breadth turned negative with 547 losers and 282 gainers, while 395 counters traded unchanged. Trading volume was 1.71 billion shares valued at  RM937.74 million.

The top losers included Nestle (M) Bhd, Fraser & Neave Holdings Bhd, Malaysian Pacific Industries Bhd, Hong Leong Bank Bhd, Kuala Lumpur Kepong Bhd, Petronas Gas Bhd, MISC Bhd, Petronas Chemicals Group Bhd, and Carlsberg Brewery Malaysia Bhd.

The actively traded stocks included Yong Tai Bhd, DGB Asia Bhd, Inix Technology Bhd, Iris Corp Bhd and AT Systemization Bhd.

The gainers included Toyo Ventures Holdings Bhd, Greatec Technology Bhd, Supermax Corp Bhd, Top Glove Corp Bhd and IGB Bhd.

Reuters said Asian shares edged lower on Tuesday amid uncertainty about Senate runoffs in Georgia, which could have a big impact on incoming U.S. President Joe Biden's economic policies.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.12%, pulling back from a record high hit in the previous session. Australian stocks fell 0.16%, it said.

Inter-Pacific Research Sdn Bhd said the FBM KLCI succumbed to fresh selling pressure at the start of the new year with glovemaker stocks dropping the most in some two months upon the resumption of the regulated short selling activities.

It said the selldown also left their stock prices at the lowest level in six months with their weakness also spreading to the broader market,resulting in market breadth turning overwhelmingly negative, even as the lower liners were mostly rangebound.

Meanwhile, it said traded volumes increased as more market players returned.

“Yesterday’s selling was a surprise as glove maker stocks have already consolidated and surrendered most of its 2020’s massive gains in December.

“As a result, the key index is tethering at 1,600 points and is on the brink of surrendering all of its 2020 gains. The FBM KLCI is also looking increasingly frail as we think sentiments on glove makers could remain depressed for longer, in view of the vaccine availability that may bring about oversupply risk.

“Even if there is a rebound among glove maker stocks following their recent steep falls, we think that it may be modest for the time being as sentiments on these stocks remain mostly indifferent.

“Consequently, we think that there remains substantial downside risk to the market that is further compounded by the heightened domestic political uncertainties.

“This leaves the 1,600 points support under threat and if it gives way, the next support is at the 1,590 level. Meanwhile, the near –term resistances are at 1,612 and 1,620 points respectively,” it said.