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Tuesday, November 29, 2016
Market Daily Report: KLCI falls with oil as OPEC decision looms
KUALA LUMPUR (Nov 29): The FBM KLCI fell 1.73 points or 0.1% with crude oil ahead of the crucial Organization of the Petroleum Exporting Countries (OPEC) meeting in Vienna, Austria, tomorrow to deliberate over a potential output cut.
At 5pm today, the KLCI closed at 1,626.93 points on losses in oil and gas-related shares like SapuraKencana Petroleum Bhd and Petronas Gas Bhd.
"Although it might be true that (crude oil) markets will rebalance in 2017 whether a production cut is reached or not, oil bears are just waiting for a signal to push the sell button, and 15% decline towards US$40 (about RM178) looks very reasonable in case no significant deal was reached," FXTM chief market strategist Hussein Sayed wrote in a note today.
"However, markets still believe that a production cut of 500,000 to 1 million barrels per day is achievable tomorrow and this explains Monday's price action where both major benchmarks rose by more than 2%," Hussein said.
Bursa Malaysia saw 1.38 billion shares worth RM1.72 billion traded. Decliners overwhelmed gainers at 543 against 214 respectively.
An analyst told theedgemarkets.com that the KLCI lacked catalysts. "The KLCI continues to trade sideways amid a lack of catalysts, while the ringgit and oil prices remain weak," he said.
Reuters reported that Brent crude futures were trading at US$47.69 per barrel at 0741 GMT, down 55 cents or 1.14% from their last close. It was reported that oil prices fell on market jitters over whether producer cartel OPEC would be able to hammer out a meaningful output cut during a meeting on Wednesday, aimed at reining in a global supply overhang and propping up prices.
Source: The Edge