Malaysia: KLCI pares losses as GDP result lifts

• Nov 13, 2020

KUALA LUMPUR: The FBM KLCI retraced some of its earlier losses to enter the lunch break just slightly in the red following the announcement of GDP data that contracted at a slower pace than expected.

Bank Negara announced earlier today that Malaysia’s economy in the third quarter contracted at a smaller pace of 2.7% in the third quarter ended Sept 30,2020 compared with 17.1% plunge in the second quarter, underpinned by a recovery in the manufacturing sector.

At 12.30pm, the benchmark equity index was down 3.6 points to 1,587.18. Trading activity remained on pace at 7.17 billion shares valued at RM2.4bil.

With the market picking up on bullish momentum over recent days, investors have been loathe to give up recent gains and have instead been shoring up equity prices.

Nevertheless there are expectations of a correction over the near term given the strong advance that has erased the FBM KLCI’s losses year to date.

“We think that they key index is increasingly toppish and mahy warrant a pullback over the near term.

“The lower liners meanwhile remain supported by the liquidity-driven market as investors capitalise on the positive market sentiment,” said Malacca Securities Research.

The research house foresees additional upsides to be capped by the immediate resistances at 1,600-1,615. A pullback would see it approach an immediate support of 1,540, followed by 1,520.

Top actives today were AT Systemization up 2.5 sen to 24.5 sen, SDL down one sen to 8.5 sen and Metronic up one sen to 14 sen.

Asian markets had begin to consolidate following their recent rally as news of rising Covid-19 infections in the US and Europe dampened near-term sentiment.

Japan’s Nikkei fell 1% while China’s composite index dropped 0.75% and Hong Kong’s Hang Seng slid 0.5%.

South Korea’s Kospi bucked the trend, rising 0.4% while Australia’s ASX200 shed 0.15%

Source: https://www.thestar.com.my/business/business-news/2020/11/13/kci-pares-losses-as-gdp-result-lifts