KUALA LUMPUR: The relentless selling of Malaysian equities by foreign funds will hold back the FBM KLCI’s advance and BIMB Securities Research expects the market to remain negative in the short to medium term.
The research house said on Thursday the negative sentiment would be amid the global slowdown with immediate support for the KLCI at 1,520 followed by the critical 1,500.
On Wednesday, foreign funds were net sellers at –RM301.5mil while local retailers were net sellers also at –RM12.9mil. However, the market continued to be supported by local funds which were net buyers at RM314.4mil.
On the external front, the global shares sagged on Wednesday as investors feared fresh rate cuts in China may not be enough to stabilise its slowing economy or halt a stocks collapse that is wreaking havoc in global markets.
Europe's main stock markets, which had surged on Tuesday after China's moves, reopened 2% down as the jittery mood returned and sent investors back into safe-haven German and US government bonds.
“However, the U.S. stocks closed sharply higher yesterday, rebounded from a six-day slump that was prompted by concerns about the health of the Chinese economy,” it said. The DJIA gained 619.07 points, or 4%, to 16,285.51.
Locally, blue chips extended their gains for the second day on local fund buying of Tenaga Nasional, Sime Darby and Public Bank but AirAsia continued to languish at a new all-time low. The FBM KLCI was up 16.43 points or 1.05% to 1,580.37.
Limited time offer:
Just RM5 per month.
