FBM KLCI skids at midday on risk-off sentiment

KUALA LUMPUR: The FBM KLCI remained in the negative territory at midday amid the soft sentiment as investors were cautious after Fitch downgraded the long-term rating for the US.

At 12.30 pm, the benchmark index fell 6.16 points, or 0.43% to 1,438.40. The index opened 3.19 points lower at 1,444.56 this morning.

Decliners outpaced gainers 420 to 307, while 410 counters were unchanged. Turnover was at 1.6 billion shares valued at RM803.8mil.

“Though we reckon market sentiment may have been affected by the US downgrade, we believe this present an excellent opportunity to bargain hunt as judging by the last US rating downgrade in 2011, we noticed the equity markets did not experience any prolonged negative reaction.

“Therefore, we expect the index to hover within the 1,440-1,450 range today,” Rakuten Trade said.

Meanwhile, Hong Leong Investment Bank (HLIB) Research expects the FBM KLCI (after July’s 6% relief rally) to extend its profit taking consolidation in the short term, as investors brace for the results season, upcoming six state polls on Aug 12 and weakening technicals.

“Nevertheless, downside risk is likely to be well-cushioned (assuming status quo for six state polls) at 1,400-1,420-1, 437 zones, due to undemanding valuation at CY2024’s 12.8x P/E, all-time low foreign shareholding, optimism that global central banks are at the tail-end of rate-hike cycles, and the unveiling of high-impact investment initiatives to boost the domestic economy through the Madani economy framework and the NETR,” it added.

At Bursa Malaysia, Malaysian Pacific Industries fell 38 sen to RM28.28, Hextar Technologies lost 36 sen to RM26.24, Ayer eased 23 sen to RM7.22 and Southern Acids slid 23 sen to RM3.37.

Nestle surged RM1.40 to RM133.40, Heineken added 32 sen to RM26.12, F&N gained 32 sen to RM25.22 and Batu Kawan rose 24 sen to RM21.34.