FBM KLCI extends losses for the third day

PETALING JAYA: Pessimism persisted in the stock market over worries about the spike in coronavirus (Covid-19) cases globally, which also sent shock waves to the oil market.

Regional markets were mostly in the red as they tracked the weaknesses on Wall Street the previous night as the Dow Jones Industrial Average (DJIA) tumbled 2.72%.

The negative sentiments spilled over to Asian markets, which saw the FBM KLCI extend its losses for the third consecutive day, dropping below the 1,500-point mark.

The benchmark index of Bursa Malaysia was dragged down by 0.89% or 13.43 points to finish at 1489.20 points yesterday.

This was also due to the latest downgrade by the World Bank, which lowered its forecast for Malaysia’s gross domestic product (GDP) to contract by 3.1%, as compared to its earlier expectations of a 0.1% contraction.

An analyst said this was a minor correction in the market as it has been running ahead of its fundamentals, which hit a high of 1,575.27 points on June 10. Genting Malaysia Bhd led the 24 laggards on the benchmark index after it erased 7 sen or 2.66% to RM2.56.

Axiata Group Bhd closed 9 sen or 2.59% lower to RM3.39 while Hap Seng Consolidated Bhd dropped 19 sen or 2.22% to RM8.36.

Market breadth was negative with 728 losers and 253 gainers. A total of 388 counters remained unchanged.

Among top losers were Fraser & Neave Holdings Berhad (F&N) which slid 52 sen to RM31.96 and Petronas Dagangan Bhd, down 44 sen to RM21.20.

Concerns over the rise in Covid-19 infections especially in the United States and Brazil weighed on oil prices as the Brent Crude Oil tanked to a low of US$39.50 per barrel yesterday. The day prior, it was as high as US$42.23 per barrel.

Most oil and gas counters in Malaysia ended the day lower due to concerns that the pandemic may exert pressure on the oil demand once again.

Icon Offshore Bhd lost 0.5 sen to 12 sen, Velesto Energy Bhd down 0.5 sen to 15 sen while Dayang Enterprise Holdings Bhd dropped 4 sen to RM1.28.

The negative sentiments, which was exacerbated by the World Bank downgrade, also impacted the banking counters which were already facing pressure with the moratorium coming to an end in another three months.