Market Close KLCI volatile, rises 0.1%

Market Close KLCI volatile, rises 0.1%
Business & Markets 2013
Written by Chong Jin Hun of theedgemalaysia.com
Tuesday, 18 June 2013 17:17

KUALA LUMPUR (June 18): The FBM KLCI erased losses in volatile trade to end 1.88 points or 0.1% higher.

At 5pm, the KLCI settled at 1,774.05 points on gains in stocks like MALAYAN BANKING BHD [] and CIMB Group Holdings Bhd.

The KLCI's advance came amid market anticipation of the US central bank's likely monetary stance which can dictate the direction of global equities.

The US Federal Reserve's two-day Federal Open Market Committee meeting starts today. A monetary easing reversal via a reduction in bond purchases by the central bank can trigger a sell-off in Asian stock markets as funds flow back into US-based assets.

But analysts said a policy reversal is unlikely at this juncture.

RHB Research Institute Sdn Bhd research head Lim Chee Sing said it is still "too soon" for the Federal Reserve to reduce its bond purchases as the world's largest economy is still exhibiting mixed data.

"There is a mixture of positive and negative economic data," Lim told theedgemalaysia.com.

Lim said the Federal Reserve's stance also hinges on the backdrop of major economies China and India, both of which, are adjusting to slower growth, besides the eurozone which is now in recession.

In the US, Lim said the impact of federal spending cuts or sequester which started since March 1 this year, was felt in the second quarter.

Hence, policymakers there are expected to wait for the impact of the sequester to fizzle out before reducing bond purchases, according to Lim.

Across Bursa Malaysia today, there were 1.49 billion shares worth RM1.77 billion changing hands. There were 441 gainers versus 311 decliners.

The top gainer was Aeon Credit Services (M) Bhd while BRITISH AMERICAN TOBACCO (M) [] Bhd led decliners. The most-active stock was LUSTER INDUSTRIES BHD [].

Across Asia, Japan's Nikkei 225 fell 0.2%, Hong Kong's Hang Seng closed flat while Singapore's Straits Times rose 1.5%.

Reuters reported that Asian shares eased on Tuesday as investors waited for Federal Reserve Chairman Ben Bernanke to clarify the US central bank's plans for its stimulus programme - with the mere suggestion of fine-tuning it enough to unnerve market sentiment.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.2%, with Chinese and Australian bourses leading the declines. The materials sector in the pan-Asian index was the top loser.