KUALA LUMPUR (May 6): The FBM KLCI held on to its meagre gains at the midday break today amid some choppy trade, as crude oil prices seesawed and markets in China faltered on their return from a long holiday as investors fretted over Sino-US tensions.

At 12.30pm, the FBM KLCI was up 0.03% or 0.40 point at 1,389.95. The index had earlier gyrated between a low of 1,384.41 and high of 1,393.56.

Gainers led losers by 402 to 392, while 367 counters traded unchanged. Trading volume was 3.95 billion shares.

The gainers included Fraser & Neave Holdings Bhd, Petronas Dagangan Bhd, United Plantations Bhd, Unisem (M) Bhd, Hengyuan Refining Company Bhd, Petron Malaysia Refining & Marketing Bhd, Scientex Bhd, FGV Holdings Bhd and Hong Leong Financial Group Bhd.

The actives included Key Alliance Group Bhd, AT Systemization Bhd, Sapura Energy Bhd, FGV, Perdana Petroleum Bhd, Hibiscus Petroileum Bhd, Hubline Bhd and KNM Group Bhd.

The decliners included Ayer Holdings Bhd, Malaysian Pacific Industries Bhd, Heineken Malaysia Bhd, Nestle (M) Bhd, Rubberex Corp Bhd, Batu Kawan Bhd and Public Bank Bhd.

Meanwhile, oil prices reversed course to edge lower today as a higher than expected rise in US inventories refocused investors on the risk of oversupply amid a coronavirus-driven slump in fuel demand.

US West Texas Intermediate (WTI) crude futures fell 27 cents, or 1.1%, to US$24.29 a barrel by 0436 GMT, snapping a five-day winning streak.

Hong Leong Investment Bank research (HLIB) said the 50 basis-point overnight policy rate (OPR) cut is negative for the KLCI by virtue of the index heavyweight banking sector (net interest margin compression concerns).

In a strategy note today, HLIB maintained its KLCI target of 1,350 (14.6x global financial crises mean PER pegged to mid-2021 EPS).

“Having rebounded 13.9% from its low of 1,220 (March 19), some degree of profit-taking could perhaps emerge as we enter the May reporting season.

“Key risks to watch out for include (i) a second wave with lockdowns around the world being eased/lifted, and (ii) possible resurgence of the US-China trade war, noting the less-than-cordial statements by President Donald Trump on China,” it said.