Recession fears weigh on local stock market

TheStar Thu, Apr 02, 2020 08:50am - 1 year ago


At 5pm yesterday, the local bourse retreated 28.23 points, or 2.09% to 1,322.66. The index opened 5.99 points lower at 1,344.90 on Wednesday morning.Dealers said the Covid-19 pandemic and prospect of a global recession overshadowed stimulus efforts by governments.

PETALING JAYA: The FBM KLCI ended lower on Wednesday, amid disappointing economic prospects and weaker manufacturing data that dampened investor sentiment.

At 5pm yesterday, the local bourse retreated 28.23 points, or 2.09% to 1,322.66. The index opened 5.99 points lower at 1,344.90 on Wednesday morning.

Dealers said the Covid-19 pandemic and prospect of a global recession overshadowed stimulus efforts by governments.

Losers outnumbered gainers 523 to 355 while 358 counters closed unchanged. Turnover stood at 4.74 billion shares worth RM2.77bil. In yesterday’s session, 26 of the KLCI-component stocks were traded lower while only four counters advanced.

Hong Leong Financial Group Bhd, the top loser on Bursa Malaysia, shed 88 sen to RM12.80. Petronas Dagangan Bhd fell 78 sen to RM20.38, HEINEKEN MALAYSIA BHD declined 68 sen to RM21.20 and NESTLE (M) BHD lost 60 sen to RM136.10.

Among the heavyweights, MALAYAN BANKING BHD fell 13 sen to RM7.32, Tenaga Nasional Bhd shed 20 sen to RM11.82 and PUBLIC BANK BHD declined 22 sen to RM15.68.

The gainers on Bursa Malaysia included Malaysian Pacific Industries Bhd (MPI), Metrod Holdings Bhd, FAR EAST HOLDINGS BHD and AEON CREDIT SERVICE (M) BHD.

MPI advanced 23 sen to RM9.38, Metrod added 21 sen to RM1.29, Far East rose 20 sen to RM2.20 and Aeon Credit gained 20 sen to RM8.60.

On Tuesday, the World Bank slashed Malaysia’s 2020 gross domestic product (GDP) growth projection to negative 0.1%. This is a sharp downward revision from its previous expectation of GDP growth of 4.5%.

The World Bank said the revision incorporated slower growth momentum from the second half of 2019, but more significantly, the impact of the pandemic under a scenario whereby the disruptions to economic activities would extend for most of the year, before a partial recovery in the fourth quarter.

It, however noted that the estimate had a large degree of uncertainty, conditional on domestic and global developments, and subsequent policy responses to the pandemic.

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