KLCI pares gains as sentiment guarded on still-high local Covid-19 cases

TheEdge Thu, Jan 21, 2021 10:20am - 1 month ago

KUALA LUMPUR (Jan 21): The main index of Bursa Malaysia pared some of its gains in the mid-morning today as sentiment remained guarded on still-high local Covid-19 cases.

At 10am, the FBM KLCI was up 6.81 points at 1,608.35. The index earlier rose to a high of 1,615.22.

Losers overtook gainers by 425 to 362, while 416 counters traded unchanged. Trading volume was 1.64 billion shares valued at RM956.81 million.

The gainers included Panasonic Manufacturing Malaysia Bhd, Nestle (Malaysia) Bhd, Public Bank Bhd, JF Technology Bhd, Amtel Holdings Bhd and HPP Holdings Bhd.

The actively traded stocks included AT Systematization Bhd, HPP, Fintec Global Bhd, Dagang NeXchange Bhd (DNeX), DGB Asia Bhd, JF Technology, KTG Bhd and Inix Technologies Holdings Bhd.

The decliners included KESM Industries Bhd, Euro Holdings Bhd, Cymao Holdings Bhd, Rapid Synergy Bhd, GHL Systems Bhd, Genetec Technology Bhd, Muda Holdings Bhd and PMB Technology Bhd.

Bloomberg said global stocks climbed to fresh all-time highs today on optimism that fiscal spending will revive growth and bolster corporate earnings.

The US dollar weakened, it said.

Inter-Pacific Research Sdn Bhd said the key index remained in a consolidation trend yesterday, surrendering all its intraday gains to end the day virtually unchanged on late profit-taking/selling actions.

In its daily bulletin today, the research house said the early day’s gains were helped by Bank Negara Malaysia (BNM) keeping its interest rates unchanged, but late afternoon selling of selected index heavyweights kept a lid on the KLCI’s performance.

Nevertheless, market breadth was positive as many lower liners regained traction despite the thin trade, it said.

“We think that the market’s near-term conditions will remain guarded amid the rise in local Covid-19 cases that may require a longer lockdown to control the outbreak.

“An extended movement control order (MCO) would affect corporate earnings recovery in 1Q21 (the first quarter of 2021) and this is likely to prolong the cautious trend engulfing Bursa Malaysia's stocks currently.

“Consequently, we think the consolidation trend among the index-linked stocks is likely to persist and this could leave the key index trending within a tight band over the near term, with downside pressure also remaining.

Inter-Pacific said the immediate support is at 1,600 points, followed by the 1,590 level. The hurdles, meanwhile, are at 1,620 and 1,640 respectively.

“The lower liners and broader market indices are still looking toppish as they are still perched at their highest levels since the start of the pandemic last year.

“Nevertheless, there appears to be still ample support for many of these stocks despite thinner following from retail players. Therefore, we expect these indices to stay elevated over the near term as there is still little selling pressure,” it said.

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