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KLCI reverses earlier loss, gains seen unsustainable

TheEdge Thu, Jul 18, 2019 10:20am - 7 months ago

KUALA LUMPUR (July 18): The FBM KLCI reversed its losses and ticked up at mid-morning today, lifted by select index-linked counters but gains were not seen as sustainable given the prevailing negative sentiment.

At 10am, the FBM KLCI was up 0.26 points to 1,657.79. The index had earlier dipped to a low of 1,654.87.

Gainers edged losers by 236 to 233, while 300 counters traded unchanged. Volume was 793.51 million shares valued at RM279.89 million.

The gainers included Dutch Lady Milk Industries Bhd, United Plantations Bhd, Kuala Lumpur Kepong Bhd, Zhulian Corp Bhd, Top Glove Corp Bhd, Kossan Rubber Industries Bhd, Lii Hen Industries Bhd, MISC Bhd and Mulpha International Bhd.

The actives included i-Stone Group Bhd, NetX Holdings Bhd, KNM Group Bhd, Impiana Hotels Bhd, Green Packet Bhd, Bumi Armada Bhd and Sapura Energy Bhd.

The decliners included Petronas Chemicals Group Bhd, Yinson Holdings Bhd, Nestle (M) Bhd, Magni-Tech Industries Bhd, Texchem Resources Bhd, ViTrox Corp Bhd and Turbo-Mech Bhd.

Asian shares wobbled in early Thursday trading as Wall Street stocks dropped on early signs that the US-China trade war could hurt corporate earnings, helping to underpin solid demand for safe-haven US Treasuries, according to Reuters.

MSCI's broadest index of Asia-Pacific shares outside Japan was down a touch, while Japan's benchmark Nikkei fell 1.3% and Australian shares dropped 0.4%, it said.

Hong Leong IB Research said that despite a pause on additional US tariffs on Chinese goods during the G20 summit, the previous imposed tariffs have affected corporate earnings and outlook guidance by corporates.

"Hence, the ongoing earnings season may limit the upward move on Wall Street. In the meantime, investors are taking a cautious approach ahead of the FOMC (Federal Open Market Committee) meeting that will be held [on] July 30-31. The Dow's resistance is located around 27,500.

"With the overnight decline on Wall Street, we think the negative sentiment may spill over towards stocks on the local front, extending the current retracement phase below the SMA200 (200-day simple moving average).

"Moreover, the unresolved trade tensions, coupled with the slump in crude oil prices may put pressure amongst broader market on the local front. The FBM KLCI may trade within the range of 1,630-1,680," it said.

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