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Tuesday, June 19, 2018

Market Daily Report: FBM KLCI slumps 28.07 points, ringgit hit as US-China trade spat escalates





KUALA LUMPUR (June 19): The FBM KLCI fell 28.07 points or 1.61% while the ringgit weakened as the escalating US-China trade spat hit global markets. Analysts said foreign institutional investors sold Malaysian assets on expectation of further US interest rate hikes.

At Bursa Malaysia, the KLCI finished at its intraday low at 1,715.36 points. In currency markets, the ringgit weakened to 4.0030 against a strengthening US dollar at the time of writing.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew told theedgemarkets.com: “KLCI fell today mainly due to blue chip stocks on Bursa Malaysia being heavily sold by foreign funds.”
Pong said Inter-Pacific expects foreign selling of Malaysian assets to continue until the later part of this year in anticipation of US interest rate hikes.

Asian shares fell today. In China, the Shanghai Stock Exchange Composite fell 3.78% while Hong Kong’s Hang Seng lost 2.78%. Elsewhere, Japan’s Nikkei 225 dropped 1.77% while South Korea’s Kospi was 1.52% lower.

Reuters reported that Asian stocks sank on Tuesday and Shanghai shares plunged to near two-year lows as US President Donald Trump threatened new tariffs on Chinese goods in an escalating tit-for-tat trade war between the world's two biggest economies.

It was reported that Trump threatened to impose a 10 percent tariff on US$200 billion of Chinese goods, prompting a swift warning from Beijing of retaliation, as the trade conflict between the world's two biggest economies quickly escalated. It was retaliation, Trump said, for China's decision to raise tariffs on US$50 billion in US goods, which came after Trump announced similar tariffs on Chinese goods on Friday.


Source: The Edge

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