KLCI loses 0.89%, falls below 1,600 mark as Middle East tension rattles Asian markets

KUALA LUMPUR (Jan 6): The FBM KLCI lost 0.89% and fell below the 1,600 mark at mid-morning today as the local bourse fell in tandem with regional markets rattled by the Middle East geopolitical tensions.

At 10am, the FBM KLCI lost 14.3 points to 1,597.08.

Losers led gainers by 464 to 186, while 258 counters traded unchanged. Volume was 919.72 million shares valued at RM365.28 million.

The decliners included Fraser & Neave Holdings Bhd, Hong Leong Financial Group Bhd, Batu Kawan Bhd, PPB Group Bhd, Petronas Gas Bhd, Kuala Lumpur Kepong Bhd, Carlsberg Brewery Malaysia Bhd, Tenaga Nasional Bhd and Public Bank Bhd.

The actives included Alam Maritim Resources Bhd, Sapura Energy Bhd, Hibiscus Petroleum Bhd, Bumi Armada Bhd, Reach Energy Bhd and Avillion Bhd.

The gainers included Dutch Lady Milk Industries Bhd, Hong Leong Bank Bhd, Petronas Dagangan Bhd, SAM Engineering & Equipment (M) Bhd, Hengyuan Refining Co Bhd and Hibiscus.

Reuterssaid Asian share markets ran into turbulence on Monday as a flare-up of tensions in the Middle East sent gold to its highest in almost seven years while oil flirted with four-month peaks.

The United States detected a heightened state of alert by Iran's missile forces, as President Donald Trump warned the US would strike back, "perhaps in a disproportionate manner", if Iran attacked any American person or target, it said.

Hong Leong IB Research said that in the US, the rising geopolitical tension could be a concern towards trading sentiment on Wall Street.

"In addition, President Trump's threatening messages over the weekend which stated that US may hit 52 Iranian targets if Tehran retaliates over top general's death may cap the Dow's upside along 29,000-29,500.

"Until the tension is being resolved, we expect the Dow to trend sideways with the support located along 28,000. On the bright side, market participants will be awaiting the signing ceremony of Phase 1 trade deal on Jan 15 and further announcement of Phase 2 trade discussion moving forward," it said.

HLIB said although the technical readings are positive on the FBM KLCI, it expects the trading sentiment to turn negative, tracking the negative overnight performance on Wall Street following the US-Iran events.

"However, we expect the negative shock to be short-lived and likely to see emergence of buying interest supported by crude oil and crude palm oil prices, eventually lifting on O&G and plantation sectors and overall market sentiment on Bursa Exchange.

"The FBM KLCI could trend between 1,580-1,620," it said.