Market Close KLCI drops 18.55pts as Greece woes dampen sentiment

by **Cals** Mon 29 Jun 2015, 20:57

Market Close
KLCI drops 18.55pts as Greece woes dampen sentiment

KUALA LUMPUR (June 29): The FBM KLCI dropped 1.1%, tracking world markets in anticipation that Greece may default on its debt. A default could lead to Greece's exit from the eurozone.
Reuters reported that investors were spooked by the spectre of a Greek debt default which forced Athens to shut down its banks to prevent a run on deposits.
Malaysia's KLCI closed at 1,691.92 at 5pm. Across the region, Japan’s Nikkei 225 declined 2.88%, South Korea’s Kospi decreased 1.42%, while Hong Kong’s Hang Seng fell 2.61%.
In Malaysia, Areca Capital Sdn Bhd chief executive officer Danny Wong said the KLCI was down on sentiment following the deteriorating situation in Greece.
“The index is down on dampened sentiment, following worries on the situation in Greece. Due to this, there has been a broad selldown on emerging markets, which includes the Malaysian market,” Wong said.
Wong also noted the possible downgrade by Fitch Ratings on Malaysia's credit rating. But he said the probability of a downgrade was “rather slim”.
“Fitch is basing the potential downgrade on lower global oil prices. Oil prices have been down for about nine months already, and there has not been a significant impact on Malaysia’s trade and current account surplus, so the effect is not as bad as they thought,” he said.
Across Bursa Malaysia, 1.68 billion shares worth RM1.71 billion were traded. Decliners beat gainers at 823 against 126.
The top gainer was British American Tobacco (M) Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) while Nestle (M) Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) led decliners.
The counter with the highest number of trades included AirAsia X Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) and AirAsia Bhd ([You must be registered and logged in to see this image.] Financial Dashboard).
In currency markets, the ringgit weakeaned to 3.7863 against the strengthening US dollar as Greece's debt crisis generated demand for the US dollar. The US dollar is seen as a haven in times of market volatility.
Ambank currency strategist Wong Chee Seng said the strengthening of the US dollar was also in anticipation of the Federal Reserve raising interest rates amid an optimistic US economic outlook.
Besides the stronger US dollar, Malaysia's "rising political noise" due to negative sentiment on 1Malaysia Development Bhd has also prompted investors to sell the ringgit, according to him.