Bursa Malaysia succumbs to profit-taking pressure

KUALA LUMPUR: The rally on the FBM KLCI may have hit its peak for now as as investors took cash off the table on Friday amid diminishing hopes for a September rate cut following the release of a US jobless claims report.

At the start of trading, the key index was down 4.22 points to 1,624.96, tracking falls in all three major US stock indices.

By 9.17am, the FBM KLCI had lost 11.8 points or 0.7% to 1,617.38 after 708.7 million shares were done.

Overnight, a US report that showed lower unemployment claims than expected affirmed the strength of the labour market, sending Wall Street stocks into profit-taking mode.

The shrinking likelihood the US Federal Reserve will lower lending rates in September offset the optimism of Nvidia, which posted stellar quarterly revenue and announced a 10-for-one stock split.

“We reckon the renewed volatility overnight may see weakness permeate to stocks across Bursa Malaysia,” said Apex Securities Research in a note.

“We continue to advocate traders to remain in a defensive position with focus on the REIT and utilities sectors on the back of the market volatility.

“The energy sector may retreat with Brent oil prices slipping for the fourth straight session,” it added.

Meanwhile, domestic investors are looking ahead to the consumer price index for April scheduled to be released at midday, where Apex expects the inflation rate to remain under 2%.

YTL-related counters fell following the release of their quarterly results. YTL Power dropped 41 sen to RM4.97 while YTL Corp shed 28 sen to RM3.60.

PETRONAS Dagangan slid 16 sen to RM20.26, Tenaga Nasional lost eight sen to RM13.02 and Telekom lost five sen to RM6.50.

Kuala Lumpur Kepong was a rare bright spot, rising 14 sen to RM22.

Of actives, AHB led the list with a 0.5 sen increase to 17.5 sen.

Rounding out the Top 3, Sime Darby Property rallied nine sen to RM1.25, bolstered by its quarterly result, while Fajar Baru climbed five sen to RM43.5 sen.