FBM KLCI rises despite negative market breadth

PETALING JAYA: The FBM Kuala Lumpur Composite Index (KLCI) hit the highest level in almost 12 weeks or nearly three months, even as the overall market breadth turned negative on Thursday.

Despite its earlier decline in the morning session, the 30-stock benchmark index picked up its pace later and closed at 1,457.5 points, marking a slight increase of 5.77 points or 0.4%.

This continues the uptrend seen by FBM KLCI since mid-march 2020 as investor interest returned amid the increasing success of Covid-19 containment measures globally and domestically.

A total of 20 FBM KLCI constituent stocks rose yesterday.

This compared with eight counters that declined and two that remained unchanged.

Genting Malaysia Bhd, Dialog Group Bhd and CIMB Holdings Bhd were the top three performers within FBM KLCI, up by 3.14%, 2.97% and 2.63% respectively.

While risk appetite in the equity universe remains tempered to an extent by the ongoing Us-china tensions and the wait for Covid-19 vaccine, investor interest in certain sectors, especially glove manufacturing and healthcare, have continued to buoy market sentiment.

Glove maker Top Glove Corp Bhd climbed 24 sen to RM13.10 while Hartalega Holdings Bhd gained 26 sen to RM11.14.

Small rivals in the rubber glove space were also on the move, with Supermax Corp Bhd jumping 73 sen to RM7.63, Rubberex Corp (M) Bhd surging 70 sen to RM3.06 and Comfort Gloves Bhd rising 37 sen to RM3.45.

Careplus Group Bhd, which was the second most traded counter on the bourse, rose 14 sen to RM1.11.

As a result of the strong interest for glove stocks, Bursa Malaysia’s Healthcare index outperformed FBM KLCI yesterday, rising by 3.45%.

Meanwhile, the Industrial Products and Services index increased by 1.1%.

On the contrary, the Energy as well as Transportation and Logistics indices declined by 2.97% and 2.95% respectively.

The drop in the Energy index reflected the increase in US crude stockpiles that sent prices lower.

US West Texas Intermediate crude was 89 cents lower at US$31.95 a barrel while Brent crude dropped 82 cents to US$33.92 a barrel.

The overall market breadth was negative as 593 stocks declined, compared to 395 gainers.

A total of 375 counters were unchanged. Despite decliners trumping gainers, there remained strong trading interest on the bourse with daily volume rising to 6.94 billion shares for a value of Rm5.45bil.

A trader told Starbiz that the current market uptrend as seen in FBM KLCI and the US’ Dow Jones Industrial Average is expected to continue as more countries open their economies gradually amid increasing positive outcomes from the Covid-19 measures.

“It is not surprising if the FBM KLCI breaches the 1,500 level in the next few weeks.

“However, we have to be mindful that the positive market sentiment could be reversed if we see a second wave of the virus outbreak again or if we hear about vaccine test failures,” he said.

Across Asia, tensions between the US and China soured regional market sentiment yesterday.

Stocks in the Chinese mainland and Hong Kong fell on Thursday as the US said the latter no longer warranted its special status under US law.

The Shanghai Composite Index dropped 0.55%.

Hong Kong’s Hang Seng dove 1.75% on the news that could threaten the city’s status as a global financial hub.