KLCI cuts losses as US stock futures gain

KUALA LUMPUR (Feb 14): The FBM KLCI cut losses after settling 0.69 point or 0.04% lower at 1,538.47 during Bursa Malaysia's afternoon close as Asian equities rose with US stock futures on expectation that the Covid-19 outbreak may prompt global central banks to keep interest rates low to support their respective economies.

In theory, lower interest rates are good for equities. Among US stock futures at the time of writing, S&P futures rose 6.75 points or 0.2% while Nasdaq futures added 32 points or 0.33%.

Across Bursa at 12:30pm, 1.59 billion shares worth RM1.08 billion were traded as global markets took cue from updates on the global Covid-19 outbreak, which started in China's Hubei province's capital Wuhan.

Reutersquoted Ryutaro Kimura, a fixed income strategist at Axa Investment Management, as saying Axa expected "considerable impact" on the global economy as China now accounts for around 17% compared to 4% during the SARS outbreak in 2002-2003, and it is integral to more supply chains.

"That means countries are likely to keep interest rates low for a longer period, keeping global bond yields low. Such an expectation in turn is supporting the world's share prices," Kimura said.

Bloombergindicated that China’s Hubei province reported 4,823 additional coronavirus cases, confirming that the nearly 15,000 reported a day earlier was a one-off situation due to a new method for counting infections.

"The latest figure is still roughly double what the province was reporting daily before the new method was used, and sets a new benchmark to measure the outbreak. The death toll in China was at 1,380, lowered by more than 100 to account for some double-counting, while total cases topped 63,000,"Bloombergreported.

Across Bursa, top decliners included KLCI stocks Public Bank Bhd and Hong Leong Financial Group Bhd. Leading gainers included Carlsberg Brewery Malaysia Bhd and Yinson Holdings Bhd.

Most-active stocks included My EG Services Bhd and Ekovest Bhd.