Monday 02 Oct 2023
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KUALA LUMPUR (Aug 17): Falling crude oil prices and the depreciating ringgit continued to weigh the FBM KLCI down. At 5pm, the KLCI closed 24.28 points lower at 1,572.54 after falling to its intraday low of 1,569.19 points.

At the point of writing, the ringgit weakened to 4.0995 amid concerns on China's yuan devaluation and US interest rate hikes. Compared to the US dollar, the ringgit had earlier depreciated to a new intraday level at 4.1315.

In the commodities market, Brent oil was down at US$48.61 per barrel at 4.39pm while US oil retreated to US$41.84. Weaker oil prices do not bode well for the ringgit as the commodity forms a crucial component of the Malaysian economy.

Across Bursa Malaysia, 2.06 billion shares valued at RM1.95 billion changed hands. Declining counters outpaced risers at 836 to 149 while 215 counters remained unchanged.

KLCI put warrants dominated the top gainers list while Nestle (M) Bhd led losing counters.

Investors buy index-linked put warrants to hedge against broader market weakness.

Also of note are oil and gas-related counters like SapuraKencana Petroleum Bhd and KNM Group Bhd, both of which fell among the most-active list amid lower oil prices.

Analysts said the KLCI had room for further losses. An analyst with Hong Leong Investment Bank Bhd told that the KLCI could hover around 1,500 points in the near term.

He said the broader market was still perplexed by certain internal and external headwinds.

"The next support level is 1,480 points. Should the benchmark index touch a low of 1,480 points, a technical rebound is expected to happen," he said.

Asian markets fell. South Korea's Kospi was down 0.75% while Hong Kong's Hang Seng fell 0.74%. Japan's Nikkei 225 ended flat.

Reuters reported today that Asian stocks were dragged lower by volatile Chinese equities on Monday, as relative stability in the yuan failed to assuage underlying concerns that Beijing may push its currency further down after last week's surprise devaluation.


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