KUALA LUMPUR (Jan 6): The main index at Bursa Malaysia fell 0.75% at mid-morning Wednesday and slipped below the 1,600 level as index-linked banking stocks dropped, against the backdrop of mixed regional markets.

Banking stocks came under pressure after Fitch Ratings said rating outlooks have turned negative for banks in most jurisdictions this year compared to 2020.

Fitch said the rating outlook for Malaysian banks was “negative”, while the sector outlook was “stable”.

It said the key issues for Malaysian banks were slow non-performing loan recognition, lower profitability and property market risks.

At 10am, the FBM KLCI lost 12.04 points to 1,596.31.

Market breadth was tepid with 483 losers and 306 gainers, while 408 counters traded unchanged. Trading volume was 1.84 billion shares valued at RM936.91 million.

The top losers included Heineken Malaysia Bhd, Carlsberg Brewery Malaysia Bhd, Hong Leong Financial Group Bhd, Nestle (M) Bhd, KESM Industries Bhd, Petronas Gas Bhd, Greatech Technology Bhd and Aeon Credit Service (M) Bhd, CIMB Group Holdings Bhd, Malayan Banking Bhd and RHB Bank Bhd.

The actively traded stocks included Vortex Consolidated Bhd, DGB Asia Bhd, AT Systematization Bhd, Sapura Energy Bhd, Puncak Niaga Holdings Bhd, KNM Group Bhd and Iris Corp Bhd.

The gainers included Kobay Bhd, Toyo Ventures Holdings Bhd, KPower Bhd, Hengyuan Refining Company Bhd, Petron Malaysia Refining & Marketing Bhd and Euro Holdings Bhd.

Reuters said Asian stocks were mixed on Wednesday as investors anxiously awaited results of US runoff elections that would determine the legislative balance of power in the world's largest economy while oil prices rose on news of planned output cuts.

Adding to broader uncertainty in markets was the latest twist in a regulatory saga over whether the New York Stock Exchange would delist three Chinese telecom giants on security grounds, it said.

Rakuten Trade said US stocks recovered as buyers emerged on the back of better economic data and hopes for a speedy US economic recovery.

It said the Dow Jones Industrial Average gained 168 points after earlier losses to close at almost the 30,400 level.

“Nonetheless, sentiments remain tepid as many are also waiting for the results from Georgia’s runoff election.

“On the local front, we believe the FBM KLCI to edge higher today on the back of improving crude oil prices and expect the index to hover within the 1,610/15 range amid the volatile glove counters.

“For today, we expect buying interests could shift to the oil and gas (O&G) stocks following the improvements of crude oil prices with the Brent crude now moving closer towards the US$54/barrel.

“Some of the O&G stocks to look out for are Hibiscus Petroleum Bhd, Reach Energy Bhd, Uzma Bhd, KNM Group Bhd, Reservoir Link [Energy Bhd], and Serba Dinamik Holdings Bhd,” it said.