US election jitters
PETALING JAYA: Taking a cue from the nail-biting US presidential election as Donald Trump inches closer to Wall Street’s favourite Joe Biden, the positive investor sentiment on Bursa Malaysia subsided entering into the afternoon session of trading.
With the US stock futures on a roller-coaster ride, especially after Trump prematurely declared victory, the FBM KLCI pared down most of its gains for the day and closed at 1,464.61 points – down from the intra-day high of 1,473.53 points.
The 30-stock index rose by 3.16 points or 0.22% yesterday.
Bursa Malaysia, alongside regional stock markets, rose during the day as investors weighed the results of the US presidential poll.
Wall Street had predicted former vice-president Joe Biden to have a clean sweep of the electoral vote, resulting in the rally of the three main indices of the US stock market a day earlier.
However, the prospects of Biden winning the polls have turned less decisive as Trump garnered 213 electoral votes against Biden’s 238 at press time.
Trump also led in most “swing states” that are crucial in deciding the next president of the world’s biggest economy.
Speaking to StarBiz, Equitiestracker Holdings Bhd head of research Peter Lim Tze Cheng (pic) said if Trump had indeed won as he claimed, this would mean more uncertainties for the global markets over the next four years.
“If Trump wins, we would see a continuation of nationalistic policies. On the other hand, a win by Biden would mean a reduction in nationalistic policies, ” he said.
When asked whether the sharp drop in US stock futures following Trump’s premature declaration of victory was a sign of investor rejection, Lim said this may not necessarily be the case.“During the 2016 presidential poll, S&P futures in the United States fell substantially in the morning session as votes were counted, but by night, it rose again after the media reported Trump having the majority.
“Investor reaction is unpredictable, ” he said.
Meanwhile, UOB Kay Hian Malaysia head of research Vincent Khoo said the market is looking for a quick approval for a new stimulus package in the United States.
“It would need bipartisan approval.
“If Democrat Biden wins the presidential election and the Republicans control the Senate, that would delay the approval, ” he said.
Commenting on the outlook of Bursa Malaysia, Khoo said uncertainties affecting the stock market are expected to ease going forward.
“The upcoming earnings season, led by glovemakers such as Top Glove Corp Bhd, would help to improve sentiment and allay investor concerns on the uncertainties, ” he said.
Banks, energy and plantation stocks were mixed despite gains in crude palm oil (CPO) and oil prices yesterday.
Among the banks, Malayan Banking Bhd and Hong Leong Bank Bhd were flat at RM7 and RM14.52 respectively, while CIMB Group Holdings Bhd edged up two sen to RM2.97 and RHB Bank Bhd, one sen to RM4.25.
However, Public Bank Bhd lost 10 sen to close at RM14.86.US light crude oil rose 22 US cents to US$37.88 and Brent rose 28 US cents to US$39.99.
Petronas Chemicals Group Bhd rose 13 sen to RM6.05 and added 1.6 points to the FBM KLCI, Petronas Gas Bhd shed six sen to RM15.80 and Petronas Dagangan Bhd lost eight sen to RM17.50.
Dialog Group Bhd added three sen to RM3.65.
CPO for third month delivery rose RM20 to RM3,090 per tonne.
KL Kepong Bhd rose 58 sen to RM22.26 and IOI Corp Bhd increased eight sen to RM4.42.
However, PPB Group Bhd fell eight sen to RM18.28 and Sime Darby Plantation Bhd was down three sen to RM4.83.
Top Glove lost 22 sen to RM8.10 and erased 2.77 points from the FBM KLCI but Hartalega Holdings Bhd gained eight sen to RM17.84 and 0.42 of a point. Supermax Corp Bhd lost 11 sen to RM8.84.
Bursa Malaysia’s overall market breadth yesterday was positive as there were 702 gainers, 377 losers and 397 counters unchanged.
Turnover was 7.30 billion shares valued at RM3.36bil.
On the external front, regional stock indices was mostly up.
Japan’s Nikkei 225 rallied 1.72%, China’s edged up 0.19%, Taiwan’s Taiex added 1.04%, South Korea’s Kospi rose 0.6% and Singapore’s Straits Times Index increased 0.79%.
Hong Kong’s Hang Seng Index, however, shed 0.21%.