Market Close US Fed exit plan sparks global sell-off, KLCI falls 0.59%

Market Close US Fed exit plan sparks global sell-off, KLCI falls 0.59%
Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Thursday, 20 June 2013 17:39

KUALA LUMPUR (June 20): The FBM KLCI succumbed to investor jitters on the US Federal Reserve chairman Ben Bernanke’s confirmation that the central bank will taper the quantum of its bond-buying programme.

At 5pm, the KLCI lost 10.54 points or 0.59% to settle at 1,762.34

The index was in the red throughout the day with a trading range of between 1,758.86 and 1,766.73 points.

Only five KLCI-component stocks closed higher. The list comprises IHH Healthcare Bhd, UMW HOLDINGS BHD [], PPB GROUP BHD [], YTL POWER INTERNATIONAL BHD [] and TENAGA NASIONAL BHD [].

The worst-hit heavyweights were BRITISH AMERICAN TOBACCO (M) [] Bhd (BAT), PETRONAS GAS BHD [] (PetGas), Bumi Armada Bhd, GENTING BHD [] and UEM SUNRISE BHD [].

JF Apex Securities senior analyst Lee Cherng Wee told theedgemalaysia.com that investors should stay cautious amid the gloomy global market sentiment.

“Investors should perform stock picking, select stocks with steady fundamentals,” Lee said over telephone.

With some index-component stocks taking a slight dip recently, Lee said this is a good time to buy the shares.

Across Bursa Malaysia, a total of 1.64 billion shares worth RM2.02 billion were traded. Decliners more than tripled gainers, at 668 and 172 respectively.

LUSTER INDUSTRIES BHD [] share and warrants were the most-active counters.

United PLANTATION []s Bhd was the top gainer, followed by GUINNESS ANCHOR BHD [] and CARLSBERG BREWERY MALAYSIA BHD [].

Today’s biggest decliners were AEON CREDIT SERVICE (M) BHD [], BAT and PetGas.

Across the Asia Pacific, Japan’s Nikkei fell 230.64 points or 1.74%, Hong Kong’s Hang Seng dropped 604.02 points or 2.88%, China’s Shanghai Composite lost 59.26 points or 2.76%, Australia’s ASX 200 shed 102.99 points or 2.12%, South Korea’s Kospi closed 37.82 points or 2% lower while Singapore’s Straits Times fell 80.53 points or 2.51%.

Reuters reported that Asian markets buckled badly on Thursday after the Federal Reserve heralded an eventual end to free money and China turned the screw on credit even as factory activity in the world's second-largest economy hit a nine-month low.

Meanwhile, Credit Suisse analyst Neal Soss said while US policymakers have indicated willingness to increase or reduce the pace of asset purchases going forward, it is clear that they expect to taper their buying later this year.

Soss said Credit Suisse had earlier expected the Federal Reserve to undertake its first reduction of its asset purchase this September, "but the July 30-31 FOMC (Federal Open Market Committee) meeting is now in play – so long as labor market data do not deteriorate and inflation expectations hold near their new, lower levels".

"The FOMC seems simultaneously anxious to start slowing the pace of its asset purchases and reluctant to tighten policy too early or too quickly," Soss wrote in a note.