KLCI finishes 1.08% lower as banks dip on expectation of BNM rate cut

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KUALA LUMPUR (Jan 18): The FBM KLCI lost 17.49 points or 1.08% to 1,609.52 today, as investors took profit on banking stocks ahead of Bank Negara Malaysia (BNM)’s overnight policy rate (OPR) meeting on Wednesday.

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The index had slipped to a low of 1,608.64 points earlier.

Hong Leong Investment Bank’s head of retail research Ng Jun Seng told theedgemarkets.com he expects range-bound trade ahead of BNM’s OPR meeting and elevated Covid-19 infections.

“I think everybody is watching whether there will be a rate cut in the upcoming OPR meeting. Banking stocks are taking a hit because the market expects BNM to cut rates,” he said.

According to him, investors were also cautious as they were still assessing the impacts of the recent movement control order (MCO 2.0) and conditional movement control order (CMCO) on the market, economy and corporate earnings.

TA Securities also said in a note today, the choppy trading sessions in the past two weeks had forced technical momentum indicators on the FBM KLCI back into consolidation and lost the recent upward traction.

“Further sideways trade is likely this week, given the weaker buying momentum trend and absence of government monetary or fiscal stimulus announcements, such as an interest rate cut or more financial assistance to cushion the adverse economic impact of MCO 2.0, which would hopefully fuel another round of recovery momentum ahead,” it said.

Across Bursa Malaysia today, 7.17 billion securities were traded for RM4.31 billion, compared with 5.85 billion securities worth RM4.06 billion last Friday.

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The market sentiment was negative, with losers outpacing gainers by 716 to 458, while 430 counters were unchanged.

Financial services index fell 1.52% to 14,802.23 points amid the talks of a potential rate cut.

Banks that dragged the KLCI index included Public Bank Bhd (down 22 sen or 1.04% to RM20.98), Hong Leong Bank Bhd (down 36 sen or 2.02% to RM17.44), Malayan Banking Bhd (down 17 sen or 2.06% to RM8.08), and CIMB Holdings Group Bhd (down 10 sen or 2.44% to RM4).

Top losers were led by Nestle (M) Bhd, which skid 40 sen or 0.29% to RM138.50.

The technology index continued to climb today, rising 3.47% to 78.06 points.

Malaysian Pacific Industries Bhd (up RM1.48 or 5.15% to RM30.2), JF Technology Bhd (up 91 sen or 15.12% to RM6.93), and UWC Bhd (up 84 sen or 7.81% to RM11.60) were among the top gainers.

Asian stocks were mixed today.

Japan’s Nikkei 225 closed 0.97% lower at 28,242.21; South Korea’s Kospi ended 2.33% lower at 3,013.93.

Meanwhile, Hong Kong’s Hang Seng closed 1.01% higher at 28,862.77; China’s Shanghai Composite index finished 0.84% higher at 3,596.22.- The Edge Market

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