Malaysian, global markets on edge on trade worries


Lower close: A Japanese woman walks past an electronic board showing the Nikkei stock index outside a brokerage in Tokyo. Asian markets were largely lower following Dow Jones’ overnight steep fall. — Reuters

PETALING JAYA: Global markets, including Bursa Malaysia, were on edge, following the steep overnight fall of US markets.

The escalating trade war between the US and China caused the US markets to perform badly, with the Dow Jones falling 2.38% to 25,324.99 after China retaliated and said it would raise tariffs to as high as 25% on more than 5,000 US products starting June 1.

Earlier during trading yesterday, the benchmark FBM KLCI opened at a near four-year low at 1,580.85 points, plunging below the important psychological 1,600-point support level.

As the day progressed, the FBM KLCI recouped almost all of its losses to close 1.9 points or 0.12% lower at 1,599.19 points.

Among the biggest losers were PETRONAS GAS BHD, falling 38 sen to RM16.50; AJINOMOTO (M) BHD, declining 26 sen to RM17.20; and Sime Darby Plantation Bhd that fell 23 sen to RM4.68.

Some of the top gainers were NESTLE (M) BHD that added RM1.30 to RM145, FRASER & NEAVE HOLDINGS BHD which gained 48 sen to RM33.86, and Hartalega Holdings Bhd that rose 16 sen to RM4.99.

Sentiment in Asia recovered after European markets opened higher aided by the slight recovery in US stock market futures.

As at press time, US stock market futures pointed to a slight positive open.

Asian markets were largely lower at press time yesterday, with Japan’s Nikkei 225 falling 0.59% to 21,067.23, Hong Kong’s Hang Seng Index declining 1.5% to 28,122.02, Singapore’s Straits Times Index dropping 0.61% to 3,214.61, and the Stock Exchange of Thailand falling 0.46% to 1,632.6.

A technical analyst said that the FBM KLCI would have to find its support and consolidate to build up its base again.

“However, because short-term index support has been broken, it would be better for investors to trade to the downside and short sentiment may be in control for now,” the technical analyst said.

Hong Leong Investment Bank (HLIB) Research said in its note yesterday that the negative sentiment under the escalated trade environment would see selling pressure dominating for the near term and upside on the KLCI could be limited at this juncture.

“At the current juncture, market participants are pricing in lower chances of any trade resolutions to be struck between the US and China, and the market could stay within the retracement phase,” HLIB Research said.


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