KLCI slides on fresh concerns over oil prices, ringgit

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KUALA LUMPUR (Jan 14): The FBM KLCI erased gains made yesterday on renewed concerns over the ringgit's depreciation and continued decline in crude oil prices.

At the closing bell, the benchmark index had lost 6.89 points or 0.39% to end at 1742.01 points.

Earlier, Reuters said the ringgit had fallen to fresh lows since July 2009, at 3.5950 per dollar. At the time of writing, the ringgit has slipped further to 3.5960 against the greenback.

According to TA Securities Holdings Bhd technical chartist Stephen Soo, exporters are the main beneficiaries of the ringgit's weakness, while banking stocks will be the most impacted.

"There is speculation over 1 Malaysia Development Bhd (1MDB) and the sovereign risk it poses, which has triggered foreign selling," he said.

Soo also said investor sentiment was still jittery as oil prices continued to fall, with near-term market support level seen at 1,730 points and  resistance at 1,770 points.

Bloomberg reported earlier today that the oil glut would persist until at least the second half of the year, when demand was set to recover.

Oil has fallen about 40% since the Organisation of Petroleum Exporting Countries (OPEC) maintained its production target at a Nov 27 meeting to defend market share rather than prices.

Brent crude dropped for a fifth day, declining 0.8% to $46.24 a barrel by 8.08 am in Dubai (12.30 pm today). The price was $77.75 before the OPEC meeting.

Across Bursa Malaysia, 1.8 billion shares worth about RM2.5 billion were traded.

The top gainers included British American Tobacco (M) Bhd, Dutch Lady Milk Industries Bhd, Nestle (Malaysia) Bhd and MISC Bhd.

Decliners were led by PPB Group Bhd, Shell Refining Company (Federation of Malaya) Bhd, Genting Bhd and Malayan Banking Bhd.

The most active stock was Minetech Resources Bhd, which saw 70.6 million shares changing hands.

Regionally, markets were in the red, with Japan's Nikkei 225 closing 1.71% down, Australia's ASX 200 ending 0.95% lower and Hong Kong's Hang Seng closing 0.43% lower.