Meltdown continues on the domestic market

  • Markets
  • Tuesday, 17 Mar 2020

KUALA LUMPUR: Bursa Malaysia resumed its freefall on Tuesday on the back of the movement control order announced by the Malaysian government and an eye-watering decline on Wall Street, which showed the Fed's stimulus measures have had little effect.

At 9.03am, the FBM KLCI had slumped 68.29 points to 1,212.34, its lowest in over 10 years.

Market breadth was once again overwhelmingly negative with 573 decliners, 23 gainers and 79 counters unchanged.

Overnight, the US market witnessed a historic sell-off as the Dow Jones plunged 13% or nearly 3,000 points, and the S&P500 and Nasdaq dove 12% apiece.

While the Fed had slashed interest rates to nearly zero to combat the Covid-19 crisis, investors wondered about the efficacy of the move and whether the central bank had spent all their ammunition.

Global markets showed the same anxieties as the continued spread of the coronavirus left investors with levels of extreme uncertainty.

On Tuesday however, Japan's Nikkei managed to hold firm with just 0.1% lost off the index. Australia's ASX200, which led declines in the region in the previous session, managed to rebound 2.6%.

Back home, the technical indicators are showing extreme oversold levels given the unrelenting decline on the market.

However, Kenanga research expects the KLCI to remain under pressure moving forward.

"On the chart, we have lowered our support levels to 1,240 (S1) (61.8% retracement level from the trough in 2009 to the peak in 2018) and1,200 (S2). Conversely, the support-turned-resistance levels are now set at 1,310 (R1) and 1,360 (R2)," it said.

Stocks seeing selling pressure in the early moring session included Nestle, diving RM7.20 to RM126, Hong Leong Financial Group falling RM2.18 to RM10.20 and Hong Leong Bank sliding 92 sen to RM12.08.

Top traded counters included Velesto down 1.5 sen to 11 sen, Pansar falling 0.5 sen to 60 sen and Hibiscus Petroleum down four sen to 26.5 sen.
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