Profit-taking weighs on FBM KLCI despite strong Wall Street gains

KUALA LUMPUR: The FBM KLCI edged lower in early trade today as investors locked in gains despite the strong performance on Wall Street overnight.

Overnight, all three major US stock indices closed at least 1% higher, with the Dow Jones Industrial Average rising 1.18% to 53,686.11, the S&P 500 gaining 1.06% to 7,747.71, and the Nasdaq Composite advancing 1.40% to 26,584.06.

Back home, the FBM KLCI fell 3.34 points, or 0.19% to 1,711.94 at 9.14 am. The benchmark index opened down 1.39 points at 1,713.74.

Among the decliners, Telekom Malaysia slid 12 sen to RM7.66, SD Guthrie fell 11 sen to RM6.29, Ta Ann lost eight sen to RM6.21, and PETRONAS Gas declined six sen to RM17.56.

On the upside, F&N rose 44 sen to RM24.82, Malaysian Pacific Industries added 30 sen to RM39.90, United Plantations gained 14 sen to RM33.16, and ViTrox advanced 10 sen to RM9.10.

Rakuten Trade noted that foreign funds remained net sellers, with almost RM800mil in total net outflows over the past three days, which could limit any meaningful uptrend in the index.

“Thus, for today, we envisage the index to trend between the 1,710-1.720 range,” the brokerage said.

Meanwhile, Berjaya Research Sdn Bhd expects the FBM KLCI to continue building on its recent recovery, supported by improved investor sentiment locally and on Wall Street overnight.

“Nevertheless, near-term market direction could remain data-dependent, with investors closely monitoring the U.S. labour market, particularly the upcoming unemployment rate data, following the latest ADP report which showed private-sector employment growth slowing to 38,000 in August from a revised 46,000 in July,” the research house said.

It noted that a softer-than-expected labour market reading could reinforce expectations of a more accommodative US monetary policy stance, potentially providing further support to global risk appetite and emerging-market equities.

“Following the recent setup, an extended bargain hunting could lift the key index towards the immediate resistances located at 1,722 points, followed by 1,727 points.

“Meanwhile, near-term supports remain pegged at 1,700 points and 1,686 points respectively,” Berjaya Research said.