KLCI extends slide as China cuts growth target

KUALA LUMPUR: The FBM KLCI slipped further on Tuesday as China's cut in economic expansion plans weighed on global prospects.

At 12.30pm, the index was down 4.62 points to 1,689.37. Trading volume was 1.49 billion shares valued at RM888.44mil. There were 385 decliners versus 308 gainers and 368 counters unchanged.

While the index opened below the 50-day simple moving average, it has since retraced some of the losses to end the morning session straddling the crucial support.

On the external front, Reuters reported that Beijing lowered the growth target for this year to 6 to 6.5 percent, as expected, from around 6.5 percent last year and offered more stimulus, including cuts in taxes and social security fees, increases in infrastructure investment and lending to small firms.

While this put Asian equities on the back foot on Tuesday, China's markets have held up relatively well.

The Shanghai Composite Index started the day in the red but climbed to 0.1% in positive territory by midday. The blue chip CSI 300 Index and Hong Kong's Hang Seng Index were each a fraction lower.

Japan's Nikkei Index lost 0.4% while South Korea's Kospi was down 0.55%.

Leading losses on the KLCI, Tenaga Nasional dropped 14 sen to RM12.82 while Sime Darby Plantation fell two sen to RM5.09 and Nestle shaved 60 sen to RM148.20.

Top active counters were Bumi Armada slipping one sen to 16.5 sen, Sapura Energy trading unchanged at 32 sen and Dayang gaining 0.5 sen to RM1.41.

The cut in the Chinese economic growth target pulled down crude oil prices as fears of dampened demand. US crude los 31 cents to US56.28 a barrel while Brent crude fell 33 cents to US$65.34 a barrel.

In currencies, the ringgi was unchanged against the greenback at 4.0765. It rose 0.6% against the pound sterling at 5.3638 and was littl changed against the Singapore dollar at 3.0089.