KLCI extends consolidation on technical weakness, oil prices jump

  • Markets
  • Thursday, 11 Jul 2019

KUALA LUMPUR: The FBM KLCI slid 2.19 points to 1,676.78 despite rising optimism over a potential rate cut by the US Federal Reserve in July.

However, market breadth on the stock exchange over the morning session was positive with 403 gainers versus 297 decliners and 390 counters unchanged. Trading volume was 1.52 billion shares valued at RM968.05mil.

The local benchmark index has weakened during the consolidation phase over recent trading days that saw the share slip below the 200-day simple moving average.

Kenanga research noted that the technical indicators suggest "uninspiring" momentum.

The performance of the local market comes at odds with the regional advance following US Fed chairman Jerome Powell's testimony yesterday that hinted at a rate cut by the end of the month.

The depth of the cuts remains in question as analysts attempt to forecast if the central bank will cut rates by 25bps or 50 bps.

The Shanghai Composite Index and blue chip CSI300 Index were up 0.3% each while Hong Kong's Hang Seng Index gained 1.2%. Japan's Nikkei Index added 0.5% and South Korea's Kospi Index jumped 1.2%.

Local equities weighing down the market included Public Bank lost 10 sen to RM23.02, Tenaga Nasional dropped six sen to RM13.68 and Petronas Gas weighed 10 sen to RM17.22.

Among the most active movers in morning trade was UWC, which extended gains by nine sen to RM1.49 after a stellar performance yesterday that saw it soar 71% above its IPO price.

KNM topped the active trading list with a one sen gain to 32 sen while MyEG rose three sen to RM1.49.

Oil prices meanwhile are rising as a storm brews over the Gulf of Mexico and a British oiltanker was stopped by Iranian ships in the Middle East.

US crude rose 27 cents to US$60.68 a barrel and Brent crude added 23 cents to US$67.24 a barrel.

The ringgit is on an uptrend following the Fed's bearish remarks over the US economy. The local currency gained 0.4% over the US dollar to 4.1220, 0.1% over the pound sterling to 5.1665 and 0.1% over the Singapore dollar at 3.0416.