KUALA LUMPUR: With the trade conflict raging on between the US and Canada, investors are shirking global equities in favour of safe-haven assets.
Bursa Malaysia has not been spared the sell-down, which is set to continue going by the weak start on Wednesday.
As the buzzer rang to signal the start of trading, the benchmark FBM KLCI gapped down 16.56 points to 1,504.74, points away from the psychological support of 1,500 points.
This serves as the benchmark index’s weakest level in nearly 14 months.
Malaysia’s banks stocks, touted to be defensive plays in times of volatility were not spared the sell-down, dragging down the financial services index down by more than 2% within the first five minutes of trading.
Maybank dropped 12 sen to RM10.12, CIMB shed four sen to RM7.22 and Public Bank lost seven sen to RM4.34.
Other laggards included Kuala Lumpur Kepong falling 32 sen to RM20.15, Tenaga Nasional shedding six sen to RM13.34 and PETRONAS Dagangan losing 20 sen to RM16.50.
Among the most actively traded stocks, Sapura Energy
lost 0.5 sen to four sen, Nationgate dipped one sne ot RM1.14 and Bina Puri was unchanged to 33 sen.
Rakuten Trade said it believes foreign funds remain the net sellers as many are pulling out of the Southeast Asian markets as a knee-jerk reaction to the tariffs conflict, and finding safety in Hong Kong.
“We are certainly buyers of local shares at current levels, trending at a cheap 14x market price-earnings ratio hence expect some bargain hunting activities to emerge and the index to hover within the 1,515-1,530 range today,” said the research firm in a note.
TA Securities, meanwhile, said investors should remain cautious as they await US consumer and producer price inflation data, as well as consumer sentiment readings, later this week.
“Immediate index support is lowered to the 1,500 psychological level, with next key retracement support seen at 1,472.
“Immediate resistance is also revised down to 1,550, then 1,580, with next upside hurdles at 1,605 and 1,630,” it said in its market commentary.