KLCI sheds weight as glove counters fall on vaccine news

KUALA LUMPUR: Glove makers led the FBM KLCI lower as news that Russia had registered the world's first Covid-19 vaccine sent investors on a profit-taking spree.

While the Russian discovery has been met with scepticism by global health experts, glove counters including sector heavyweights Top Glove and Hartalega were seen making a hasty retreat.

However Malacca Securities Research expects investors to return to the stocks, which have been trading at overheated levels, after a correction.

"The pullback in healthcare stocks is deemed to be healthy for investors to digest their recent gains before returning into the scene again in the foreseeable future," said the research firm.

At 12.30pm, the FBM KLCI was down 14.38 points to 1,550.36, its lowest in nearly six weeks. Top Glove's decline of RM2.46 to RM24.84 single-handedly erased 10 points off the index while Hartalega's RM1.54 retreat to RM16.76 brought it eight points lower.

Overall sentiment in the domestic market was also seen weakening on the back of Wall Street's negative performance overnight, which snapped seven days of gains. The Nasdaq Composite Index shed 1.7% after a fall in late-session trading as US technology counters succumbed to selling pressure amid lower Chinese smartphone shipments in July.

Meanwhile the impasse between Washington policymakers over a US stimulus package also dampened hopes that the economy would be further buffered against the effects of the coronavirus.

Most Asian markets reacted negatively to the news at their open on Wednesday, led by a 2% slump in Chinese stocks.

The bearish mood on Bursa Malaysia did little to dampen the trading activity as evidenced by the 13.14 billion shares that crossed in the morning session. Trading value hit RM5.09bil, which was the highest recorded value in the first half of the day in over a week.

Topping the most active list for the second day running was Sapura Energy, which saw 992.29 million shares exchanging hands. The stock was down 1.5 sen to 13 sen after yesterday surging 45% as traders shifted their attention to oil and gas counters amid an advance in crude oil prices.

Other O&G-related counters include Hibiscus Petroleum, which was flat at 66 sen after rallying 9% in the previous session, and Bumi Armada, which was also unchanged following yesterday's 22% jump to 27.5 sen.

"We continue to favour the energy sector following Brent oil prices attempt to break above the US$45 a barrel level," said Malacca Securities in its outlook.

Crude oil prices moved higher on Wednesday as US inventories showed sharper-than-expected drawdowns. Brent crude rose 19 cents to US$44.69 a barrel and US crude gained 12 cents to US$41.73 a barrel.
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Bursa Malaysia , FBM KLCI , crude oil , ringgit , equities


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