KLCI pares loss, remains in the red

TheEdge Wed, Jan 08, 2020 10:24am - 4 years View Original


KUALA LUMPUR (Jan 8): The FBM KLCI pared some of its losses at mid-morning today after having slumped more than 1.2% in early trade following escalating Middle East tensions after rocket attacks on Iraq.

At 10am, the FBM KLCI lost 15.4 points to 1,595.64. The index had earlier fallen to a low of 1,589.65.

Losers thumped gainers by 571 to 108, while 256 counters traded unchanged. Volume was 1.07 billion shares valued at RM406.39 million.

The losers included Nestle (M) Bhd, Carlsberg Brewery Malaysia Bhd, PPB Group Bhd, Kuala Lumpur Kepong Bhd, Hong Leong Financial Group Bhd, Public Bank Bhd, Malaysia Airports Holdings Bhd, Heineken Malaysia Bhd, Time dotCom Bhd and Hong Leong Bank Bhd.

The actives included Alam Maritim Resources Bhd, Priceworth International Bhd, Sapura Energy Bhd, Vortex Consolidated Bhd, Velesto Energy Bhd and Hibiscus Petroleum Bhd.

The gainers included BIMB Holdings Bhd, GHL Systems Bhd, Amway (M) Holdings Bhd and Lingkaran Trans Kota Holdings Bhd.

Reuters said Asian shares and US treasury yields plunged on Wednesday, while gold and oil shot higher after Iran fired rockets at an Iraqi airbase that hosts US military forces, stoking fears of further sharp escalations in a developing conflict.

Iran's missile attacks on the Ain Al-Asad air base and another in Erbil, Iraq, early Wednesday came hours after the funeral of an Iranian commander whose killing in a US drone strike has raised fears of a wider war in the Middle East, it said.

Hong Leong IB Research said following the airstrike in Baghdad last Friday (Jan 3), most of the market participants are having further concerns the tensions may persist and it could dampened the risk appetite for equities moving forward.

Also, it said the US defence official stating that Iran's military is displaying "heightened state of readiness", coupled with the breaking news that the Iraqi airbase hosting US troops is fired with missile attacks, may cap upside on Wall Street and investors would look into safe haven assets.

"The Dow's trading range will be located around 28,000-29,000 and the Dow futures are plunging more than 250 points (at the point of writing).

"Although technicals on FBM KLCI are fairly positive, breaking news this morning stating that rockets were fired at an Iraqi airbase that hosted US troops could send equities on a lower note.

"Also, despite market participants focusing on the Phase 1 trade deal, the heightened US-Iran tensions would put pressure on the upside on FBM KLCI for now.

"The FBM KLCI's resistance is located around 1,620. Nevertheless, traders may look out for safe haven asset (gold and Japanese yen) for alternative trading opportunities," it said.

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